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Does Polkadot (DOT) have a future in 2022? – The great prognosis

 


Polkadot is a blockchain project released in 2017. It enables different blockchains to be connected and communicate with each other. Polkadot's vision is to create its own "Internet of Blockchains" that gives control back to the user.

The major goal of Polkadot's concept is to increase interoperability on the blockchain. So-called parachains can be used to connect individual blockchains with one another and thus form their own network. Polkadot's internal token is the DOT. It is required to couple new blockchains to the "main chain".


How does the Polkadot system work?

The Polkadot network focuses on the main chain. This is called the so-called "relay chain" in the network. It manages the connections, the so-called "parachains", which are connected to the network over time. The Relay Chain offers a limited number of slots to connect the parachains to.


The DOT tokens are required to start new blockchains and link them to the relay chain. The number of DOTs is inflationary. This number is expected to increase by 10% every year. This is intended to pay out DOTs to the people who actively stake and thus secure the network as validators.


The Polkadot Relay Chain has limited space for certain parachains here. To increase this space in the long term, Polkadot's team is working to create what are known as  Nested Relay Chains  . The slots on the relay chain are leased to various projects through auctions over time. A rented slot gives a blockchain the ability to write to the relay chain block.


What are the advantages of the technology?

The big advantage of Polkadot is the fact that your own blockchain projects can be implemented quickly, efficiently and at low cost. New projects often do not have the size and number of users to operate a network right away, which can ensure the security and continuity of the blockchain.

The Polkadot network provides these missing resources by offering interoperability and allowing other blockchains to participate in a coherent system that offers security and reliability. Smaller projects can thus use resources and thus develop more stably.


How has the DOT token price moved in recent months?

Like many other cryptocurrencies, the price of the DOT token peaked in November 2021. Earlier in the month, the price of DOT surged above $53. By the end of the year, however, the price had already fallen massively. By the turn of the year, the DOT had lost almost 50% of its value and was priced at just $29.

In the months that followed, Polkadot's price continued to fall. In February and March we saw an increase again in between. Since April, the price has fallen sharply again and fell below the $6.50 mark around July. In the last few weeks, however, the DOT price has stabilized again. 


Can the DOT token be staked?

Polkadot uses the efficient Proof-of-Stake consensus mechanism to validate transactions . This means that you can also stake the DOT token and thus earn rewards with Polkadot. 


Polkadot uses the Proof-of-Stake approach to protect the relay chain from attacks. As already mentioned, the total number of DOT tokens increases by 10% every year. These additional tokens will be distributed to the stakeholders. 


You can stake DOT on most major crypto exchanges.

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