Polkadot: Can DOT Survive The BEAR Market?! Deep Dive!!

Like most cryptocurrencies polkadot has Been taking a beating during the bear Market Behind the scenes however its ecosystem Has only continued to expand as new Power chains plug in So today i’m going to give you a bit of Background on polka dot bring you up to Speed with some of the project’s most Important updates and tell you how dot Is going to handle the bear market [Music] Before i talk about polka dots you need To know what this video is and is not Financial advice is not a part of the Plot education and entertainment are the Only things it’s got so please contact a Financial advisor if your portfolio is Starting to rot Also note that i hold dot but i’ll make Sure my bias is impossible to spot If this is the first time we tango my Name is guy and some call me the bard of Crypto that’s because i create the most Lyrical crypto content on this show Coins tokens news reviews and packed With facts and stats that will keep you In the know So if you’re ready to grow subscribing To the channel and pinging that Notification bell is the way to go Okay that’s all you need to know about This crypto bro let’s talk about Polkadot and what it has on the go

If you’re unfamiliar with polkadot Here’s what you need to know Polkadot was founded in 2016 by ethereum Co-founder gavin wood it was built by Parity technologies a software company Based here in london england Polkadot’s development is coordinated by The web 3 foundation a non-profit based In switzerland Polkadot raised around 145 million Dollars in 2017 and raised an additional 100 million dollars in 2019 and 2020. The second round of sales was to Compensate for the 100 million dollars That were lost when the project’s Ethereum wallets were compromised Shortly after the first round of sales This left polkadot with around 130 Million dollars of initial funding and Though many polkadot projects have since Raised tens of millions of dollars Polkadot itself has not received any Post ico funding Polkadot’s mainnet went live in the Summer of 2020 and though it is fully Functional the project is still Technically in development Under the hood polkadot uses a Proof-of-stake blockchain called the Relay chain which leverages a novel Consensus mechanism called nominated Proof of stake which is like delegated Proof of stake but better Polka dots relay chain can process

Around 1 000 transactions per second and It is currently secured by around 300 Validators and over 27 000 nominators Which are analogous to delegators Note that polka dots relay chain can Support a maximum of 1 000 validators in Its current form Now while the hardware requirements Associated with running a polka dot Validator are low validators must Currently stake a minimum of 1.8 million Dot to become part of the validator set According to the polkadot app’s website That’s over 14 million dollars at the Time of shooting Meanwhile the minimum stake for Nominators currently sits at 128 dot According to the polkadot apps website Which is a much more modest 1000 or so Dollars at the time of shooting Note that the minimum stake required to Become a validator or nominator can and Often does change Validators and nominators must also lock Their dot coins for 28 days and any Misbehaving validators are slashed In return for their security services Validators and nominators can expect to Earn around 15 and 14 per year Respectively according to staking Rewards Now although polkadot is a smart Contract cryptocurrency its relay chain Has limited smart contract functionality

As it only handles transactions related To staking governance and standard dot Transfers Most of polkadot’s smart contract Functionality comes from proprietary Blockchains called parachains that plug Into polkadot’s relay chain for security Note that parachains do not have to use Dot for transaction fees and do not even Necessarily need a coin or token to Operate Now there are three types of parachain Common good parachains para threads and Standard parachains Because the relay chain can only support 100 parachains each type of power chain Has its own unique purpose and selection Process Common good parachains are intended for Things like bridges to other Cryptocurrencies and they’re selected Via community governance Para threads are pay-as-you-go Parachains which are arguably intended For institutions Whoever pays the highest price gets the Power thread and multiple institutions Can share the same power thread Standard parachains are intended for Crypto projects and they’re selected Using parachain slot auctions which Involve taking a snapshot of the dot Provided by the project at a random time Before the auction ends

This is to prevent the insane last Minute bidding you see on websites like Ebay To help them win a parachain slot most Crypto projects will hold something Called a parachain loan offering or plo Which makes it possible for their Community to delegate dot to the crypto Project’s parachain slot auction In exchange plo participants typically Get that crypto project’s coin or token This makes plos like initial coin Offerings or icos but what makes plos Better is that the dots you use to Participate in them never actually goes To the crypto project nor is your dot Ever sold Your dot is just locked up on their Parachain for its lease period which is Usually a maximum of two years now According to powerchains.info there have Been around 24 parachain slot auctions So far and they’re scheduled to continue Until the end of august if you’re Interested in participating in parachain Loan offerings you can check out our Video about that using the link in the Description Anyways it’s only been about four months Since i last covered polkadot but a lot Has happened since then In early march gavin wood donated almost 6 million worth of dot to the ukrainian Government in a move that was seen as

Controversial by some seeing as gavin Implied that the donation had to be made In dot for what it’s worth the Ukrainians on the other end weren’t Upset and that’s what matters In mid-march popular nft crypto project Engine launched its parachain on Polkadot bringing its massive community Of more than half a million people into Polgadot’s ecosystem Parity technologies also announced that It had completed a major upgrade for its Custom programming language for smart Contracts called inc making it easier For developers to build on polkadot Former andreessen horowitz partner katie Hound also poured 10 million dollars Into a defy protocol on moonbeam a Popular polkadot parachain that uses the Ethereum virtual machine for smart Contracts This is more significant than you think Because katie’s new vc firm secured 1.5 Billion dollars in funding earlier this Year the fact that katie seems to be Interested in polkadot’s ecosystem means More of that massive money pile could Find its way to other polkadot projects In the future At the end of march another popular Polkadot parachain called akala Announced a 250 million developer fund That focuses on the adoption of ausd Akala’s crypto backed stablecoin that it

Hopes will become the standard in Polkadot’s ecosystem this is again more Significant than you think because the Primary asset used to collateralize ausd Is different types of dot meaning the Adoption of ausd would logically Translate to an increase in demand for Dot wisdomtree also launched Exchange-traded products for polkadot Solana and cardano on european stock Exchanges revealing just how much Institutional demand there is for dot And other altcoins In early april the institutional Interest in dot and other altcoins was Underscored when the chicago mercantile Exchange or cme announced that it had Added reference rates for a dozen Altcoins including polka dot For context the cme is a futures Exchange that’s popular with Institutional investors so the fact that The cme is adding reference rates for Altcoins suggests that the exchange Could be looking to offer futures for Those cryptos in the near future pun Intended In mid-april tethers usdt stablecoin Expanded to kusama polkadot’s testnet Cryptocurrency if i’m not mistaken this Makes it the first centralized Stablecoin to set up shop in polgadot’s Ecosystem and it’s expected that usdt Will find its way to polkadot in due

Course Terra classic’s now infamous anchor Protocol also announced that it would be Expanding to a carla and if i’m not Mistaken it didn’t manage to do so Before terror classic collapsed This is actually really good news Because the crypto projects with the Most exposure to terra classic were hit The hardest when it collapsed and it Sounds like akala and polkadot came Uncomfortably close to getting caught up In that mess You can find out exactly what happened To terraclassic using the link in the Description i digress In early may parity technologies Announced it had completed an important Upgrade for its parity signer mobile Wallet which only seems to have around 10 000 downloads on android devices This is a far cry from the 500 000 Downloads of the polkadot js browser Extension which is used to interact with Polkadot’s relay chain its power chains And the decentralized applications that Live on them Note that the polkadot blockchain itself Has over 1.1 million unique wallets Polkadot also announced that it had Shipped its cross-chain messaging Protocol called xcm following a code Audit that had been completed in april This means it is now possible for polka

Dots parachains to interoperate Including the decentralized applications That live on them At the end of may gavin announced that He had partnered with an american real Estate billionaire named frank mccourt To create a decentralized social media Protocol on polkadot called project Liberty Additional details about project liberty Are expected to be released later this Year but coindesk speculates that the Project will likely receive its own Common good parachain slot once it’s up And running assuming the community Agrees of course I’ll quickly point out that project Liberty was announced at one of the Crypto conferences that was taking place In davos switzerland down the street From the world economic forum’s own Annual meeting more about what happened There in the description Now if that wasn’t crazy enough parity Technologies also announced that it had Partnered with clayton a south korean Crypto project created by one of the Country’s largest tech companies cacao The partnership will see clayton build a New metaverse focused blockchain using Substrate which is used to build polka Dot and its power chains Though the announcement doesn’t say that Clayton’s new chain will become a polka

Dot chain it’s quite possible that it Will become a part of polkadot’s Ecosystem As a cherry on top moonbeam partnered With liquid staking protocol lido Finance to bring liquid staking to Polkadot this means it’s now possible to Stake your dot without locking it up More about lido finance in the Description Anyhow earlier this month a research Report by cryptocurrency exchange Coinbase found that most investors view Polkadot as an ethereum competitor which The authors argue isn’t entirely Accurate due to polkadot’s unique Capabilities The authors also highlighted the Completion of polkadot’s aforementioned Cross-chain communication protocol as Laying the groundwork for dot’s value Accrual going forward Arrington capital also announced a 100 Million ecosystem fund for moonbeam in What is likely to be the biggest bet on Any polkadot project to date as another Cherry on top chain link integrated with Moonbeam to provide reliable data feeds To polkadot developers you can learn More about moonbeam using the link in The description Now as amazing as polka dots updates Upgrades partnerships and announcements Have been dot has been getting

Absolutely decimated on the charts and I’m not exaggerating Its price is basically what it was Before the last bull market even began Dot’s abnormally poor price action is Due to a few factors and the first is The fact that the rest of the crypto Market has been getting wrecked notably Btc whose price is strongly correlated With dots not only that but coingecko’s Historical data reveals that dot’s Circulating supply has increased by Around 55 million over the last four Months alone Now i’ll note that coin market caps data Suggest dot’s circulating supply hasn’t Increased at all but coin gecko appears To be consistent with polka dots Explorers whereas coin market cap isn’t In any case assuming an average price of 15 per dot during that period this means That dot could have experienced more Than 800 million dollars of cell Pressure but it’s possible if not likely That some of this newly issued dot was Staked rather than sold Even so it’s clear that there has been a Substantial amount of cell pressure for Dot and that’s simply because the web 3 Foundation has issued no less than 60 Grants to polka dot projects since the Start of the year as per the polka dot Github this cell pressure wouldn’t be a Problem if there was enough demand for

Dots to offset it but the problem there Is that the demand for dot has been on The decline as the crypto bear market Sets in and not just from retail Investors If you watched our video about masari’s Crypto report you might recall that dot Is the most held cryptocurrency by Crypto funds after btc and eth Well the amount of dot held by exchange Traded products for polka dot has fallen By more than 70 percent since february According to just etf specifically from 100 million dollars to less than 30 Million dollars This gives us some idea of how much the Demand for dot has dropped among crypto Funds To make things worse dot isn’t required To pay for transaction fees on polka Dots power chains which means that it Lacks the key demand driver that many Other smart contract cryptocurrencies Have to be fair the demand for dot will Probably increase as new use cases for It are introduced on these power chains For now the only real demand driver for Dot is coming from individuals and Institutions who want to participate in Polkadot’s parachain slot auctions which Are ongoing The thing is that the amount of dot Being used in these auctions has Likewise been on the decline

Case in point the seven parachain slot Auctions that took place from mid-march To the end of may only saw 5.2 million Dot deposited worth just 41 million Dollars Even if we assume dot at 15 during this Time it still works out to 82 million or So dollars of demand which isn’t much The silver lining is that more than 15 Percent of dot’s circulating supply has Been committed to parochians which means They will be out of circulation for two Years Unfortunately the economic benefits of This will decline over time due to dot’s Annual inflation rate of around 7.5 Percent I’ll reiterate that polka dots power Chains are likely to create more demand Drivers for dot but whether dot can Eventually reclaim its new all-time Highs ultimately depends on the Project’s own upcoming milestones Polkadot’s official roadmap ends with Future upgrades which include its Already released cross chain Communication protocol as well as the Rollout of parathreads which will Obviously create more demand for dot as I mentioned in our previous polka dot Update the plan for now is to gradually Plug in all 100 of polka dots parachains Something that will first be done on Polka dots canary network kusama to

Ensure there are no issues Additional polka dot milestones can be Found in interviews with members of Polka dots ecosystem most notably Polkadot founder gavin wood In january this year gavin revealed that Parity technologies and the web3 Foundation were hiring lots of people in Preparation for polkadot 2.0 which has Yet to be detailed I take this as more evidence that there Has been a lot of dot selling especially Since neither of these entities has Received post ico funding In february gavin revealed that he was Working on a new governance structure Though i must admit he didn’t specify Whether it would be implemented on Polkadot I imagine this is because it’s Ultimately up to the polkadot community In another february interview gavin said Polkadot’s core developers are focused On improving the project’s scalability With the ambitious goal of achieving Millions of transactions per second in The coming years In april a member of a carlos team Mentioned in a presentation that the Project had entered a partnership with The wormhole bridge foreshadowing Collaboration between solana and Polkadot In another presentation from april a

Member of parity technologies seemingly Confirmed that there will be Collaboration with other crypto projects Stressing that the developers are Focused on creating bridges to other Crypto ecosystems In an april interview gavin slammed Other smart contract cryptocurrencies For being too centralized and said that Polka dots developers are working to Make sure the project is truly Decentralized from top to bottom If you’re wondering what decentralized From top to bottom means check out our Recent video about crypto Decentralization using the link in the Description now this brings me to my Concerns about polka dot and i’ll start By saying that dot’s poor price action Is really just part and parcel of the Crypto bear market That said dot supply and demand dynamics Just aren’t on a par with every other Smart contract cryptocurrency and that’s My first concern about polkadot besides Actually being used to pay for Transaction fees on their native Blockchains almost every other smart Contract cryptocurrency has a very Important demand driver and that’s Stable coins As far as i can tell stable coins are Going to be one of the few organic Demand drivers for smart contract

Cryptocurrencies during the bear market And this is something that polka dot Currently lacks Not only is it something that polkadot Lacks but it’s something that wouldn’t Even result in an increase in demand for Dot because well it’s not used to pay For transaction fees on its power chains Which is where these stable coins will Probably end up I will once again reiterate that polka Dots power chains will likely create new Demand drivers for dot but so far the Biggest one has been akala’s ausd Stablecoin which given terra’s recent Collapse may not be all that appealing To individuals nor institutions Case in point there’s only around 3 Million ausd on kusama’s karora Parachain and only around 5 million ausd On polkadot’s akala parachain Compare that to the billions of dye that Are currently in circulation This ties into my second concern and That’s the relentless cell pressure that Dot has seen the fact of the matter is That dot’s existing demand drivers would Probably be enough to support its price If there wasn’t so much cell pressure As i mentioned earlier the entities Behind polkadot never complete post-ico Funding rounds That means that one of the only Remaining ways they have to be able to

Continue funding ecosystem development Is through the sale of dot The good news is that this is likely to Change as polka dot projects continue to See tens of millions of dollars of Investment from crypto vcs this capital Will almost certainly attract developers And new projects which is what the web3 Foundation and parity technologies have Been spending their money on This relates to my third concern and That’s competition if you’ve been Keeping up with my crypto updates you’ll Know that polkadot solana and near Protocol are all coded in rust This means that they’re fighting for the Same pool of developers a pool that’s Shrinking as the bear market sets in Solana and near protocol have much more Capital than polkadot to woo developers With but the former seems to be having Some serious issues of its own and the Latter appears to be lacking the brand And mission that inspires so many crypto Devs A brand and a mission might be polka Dots biggest edge over its competitors So much so that it still continues to Attract developers crypto projects and Even institutional partners despite its Sub-optimal tokenomics which will Hopefully improve as time goes on That’s why i will continue to hold dot And if its current downtrend continues i

May just accumulate even more and if You’re wondering what all that stuff About solana and nir protocol is about You can check out our video comparing The two projects using the link in the Description And that is all for today’s polka dot Update if you found it helpful help us Out by smashing that like button If you want to make sure you don’t miss The next video subscribe to the channel And ping that notification bell While you wait for the next flick to hit The tube you can check out the coin Bureau clips channel for more you can Also tune into the coin bureau podcast To go down the crypto rabbit hole with Myself and mad mike Be sure to follow me on twitter tiktok And instagram too and join my telegram Channel to see just how much alpha i Have for you The only thing better is my weekly Newsletter which is where i reveal what Other cryptos i hold as part of my Portfolio and give you my exclusive take On the crypto market and where it could Go If the bear market has your portfolio in The red you can check out the coin Bureau deals page for a helping hand if You happen to be sitting on some gains Consider supporting the channel by Getting some cool crypto merch from the

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