Why is Polkadot the best among Defi Investment Options?
Polkadot (DOT) currently ranks 5th with $12.4 billion in market capitalization. Polkadot (DOT) has risen by more than ever in the last week, setting one of the biggest rallies on the altcoin market relative to other prominent cryptocurrencies.
Over the past 24 hours, the price of Polkadot has risen by over 16.83 percent and is even today high at $14.25. Other large-scale Altcoins, like Litecoin, have also seen price rises, which have increased by 13% in the last week.
What Is Polkadot?
Polkadot is a multichain open-source sharding protocol that allows cross-chain data or asset types to be shared rather than only tokens, meaning that a large variety of blockchains are interoperable.
This interoperability aims to create a decentralized and user-controlled private network and simplify the production of new applications, organizations, and services.
Polkadot links public and private blocks, unofficial networks, oracles, and potential developments, allowing individual blockchains, via the Polkadot relay chain, to trustfully exchange knowledge and transactions.
The DOT token from Polkadot has three specific objectives: to provide network management and operations and build para-chains by binding.
Four main components in Polkadot:
- Relay Chain: “the heart of Polkadot” helps to build a vast network of different chains, consensus, interoperability, and security.
- Parachains: separate chains of tokens and optimized for particular applications.
- Parathread: like para-chains with an affordable pay-as-you-go model but universal accessibility.
- Bridges: makes the connection and collaboration between para-threads and para-chain and external blockchain networks such as Ethereum.
What’s Unique in Polkadot?
Polkadot is a shrouded multichain network that enables several transactions to be carried out parallel on many chains (“para-chains”). Scalability is increased with the parallel processing power. Custom blockchains can be built rapidly and efficiently via the Substrate System and linked within minutes to the Polkadot network.
The network is also incredibly scalable and versatile, enabling knowledge and features to be shared by participants similar to mobile applications. Polkadot can be modified dynamically without a fork to add or delete new functionality.
The network has a very advanced user management scheme, which also leads to protecting the network. Communities should adapt their management of Polkadot to the requirements and evolving circumstances of their blockchain. Nominators, validators, collators, and fishers all carry out different activities to help protect and manage the network and avoid misuse.
At the moment, Polkadot has a 1 billion tokens allocation, after the resettlement of the network’s original full availability by August 2020 of 10 million. The upgrade was done to eliminate the use of small decimals and to encourage estimation.
Booming Defi investment options
For Defi, 2020 was a fantastic year, and some experts think it will be superior by 2021. Though we are only two weeks out, 2021 began a crypto world bang. In addition to BTC, overall coin prices have expanded, particularly in the Defi sector.
Messari’s press releases show positive patterns over the last 30 days, 62 of which have seen positive trends in the last seven days, with at least 44 out of 70 Defi assets reported on the coin market data platform. In both groups, the highest assets during the time displayed growth of more than 150 percent.
Naturally, those explosive estimates evoke the insane market activity of the Defi summer of 2020. Much as today, all over the world, the token rates were up. In the fall, though, the boom ended as market corrections took prices down.
However, many observers seem to assume that we haven’t seen it yet in the crypto space. James Wo, the Digital Finance Group Founder (DFG), told Finance Magnates that “this is only the beginning, although Defi had an unbelievable increase in 2020.”
Why is Polkadot best?
- Polkadot’s price is poised to accelerate.
Polkadot, the biggest PoS chain today, has staked more than $3 billion. With the launch this year of new functionality and utilities to DOT, both the number of unique users and TVL are planning for an explosion and even a token price.
- Expansion of the DOT User Base in 2021
The number of users is “expanding,” mainly as more DeFi programs are designed to support communities of financially vulnerable individuals. Synthetic reserves and secure coins allow financially deprived consumers to enter stock markets and foreign trading avenues previously inaccessible (such as US tech inventories).
- The Rise of Proof-of-Stake
The increasing prevalence of benefits activities like staking increases the value of DeFi during 2021 as a catalyst for progress. In the year 2020, the evidence of staking has emerged, and these blockchains will continue to rule this year. The proof of stake accounts for approximately 15% of the crypto market potential and is expected to expand in 2021 through its predominance in developing dedication, like Polkadot, Cardano, NEAR, Solana, etc.
- Polkadot Network’s protection
The mass interoperability of Polkadot through a collection of standard validators helps to protect its many blockchains by spreading its data over a wide variety of para chains. The network uses the mechanism of NPS (nominated proof of stake) to select and optimize the chain’s security. This unique validity mechanism requires chains to communicate safely and individually under the same laws.
Polkadot’s price surge
After smashing the $10.00 resistance against the US dollar, Polkadot’s price began a mighty boom. This week, it was over 35%, and Bitcoin went inferior. DOT was rising faster than the resistance thresholds of $9.50 and $10.00 to the US dollar. The price was $11.60 and way over the single moveable average of over 100 dollars (4-hours).
DOT/USD pair was split over a sizeable bearish pattern with a resistance of around $9.35. (data source from Kraken). The pair could correct lower, but the initial $10.50 resistance could help.
Polkadot’s DOT Rallies
Following the $7.20 zone testing, DOT began a new rise over an $8.50 level of resistance. The bulls gathered momentum and were higher than the 9.00 dollar pivot. The 4-hours chart of the USD and DOT pair revealed a healthy split over a significant bearish pattern with the resistance of approximately $9.35.
The doors were opened to raise continuously more than $10.00. The bulls pushed the price where it went up from the $10.71 high to $7.18 low, 76.4 percent fib retraction of the downward trend.
The last swing was even near $10.71, which was way over the one-hundred single moveable average (4-hours). Finally, the $11 split happened, and the $11.60 region checked the price.
On the other hand, good support could be given by the previous breakout location, at $10.70 and $10.50. Further losses will contribute to the support area of $9.00. When a new rise begins in DOT, the $11.50 and $11.60 rate of opposition will be quickly avoided.
The next significant upside resistance could be around 12.00 dollars. The $12.00 closure may open the doors to a steady ascension. The bulls could be aimed at a $15 test in this scenario.