Improvement inside the Polkadot (DOT) ecosystem has been slowly unfolding over the previous 12 months and a half and the work put in by builders is lastly beginning to bear fruit as parachain auctions end and the primary chains launch on the mainnet.
The following section of interoperability inside the ecosystem is about to kick off now that cross-chain performance is about to go dwell. This subsequent step will permit Polkadot-based parachains to speak with one another and switch belongings between chains.
After passing group vote, v0.9.19 has been enacted on Polkadot. This improve included a batch name upgrading Polkadot’s runtime to allow parachain-to-parachain messaging over XCM and upgrading #Statemint to incorporate minting belongings (like NFTs) and teleports. pic.twitter.com/uqIB5di2Q1
— Polkadot (@Polkadot) May 4, 2022
Right here’s a have a look at what the launch of the XCM messaging system means for the value of DOT, the choices that at the moment are accessible to DOT holders and the way this growth will increase its performance inside the Polkadot ecosystem.
Polkadot is unshackled
Up up to now, DOT had restricted makes use of and was principally remoted by itself community with out a lot performance. Its most important features included staking, governance and contribution in parachain crowdloans, which helped cut back the circulating provide however did little else to actually spark demand.
The introduction of cross-chain communication enabled DOT transfers to numerous parachain networks and the variety of use circumstances for the DOT token on parachains like Moonbeam and Astar Community.
1/ $DOT is now dwell & usable in DeFi on Moonbeam!
Following this morning’s #XCM launch to @Polkadot, Moonbeam has added xcDOT, an XC-20 illustration of DOT on its parachain.https://t.co/gCXIqwlXWb
— Moonbeam Community (@MoonbeamNetwork) May 4, 2022
Information from Cointelegraph Markets Professional and TradingView exhibits that the value of DOT has been onerous hit by the six-month downtrend within the crypto market as its value has declined 73% from its all-time excessive at $55 on Nov. 4.
With the token now buying and selling at a notable help/resistance degree, it stays to be seen if the flexibility to switch DOT throughout varied parachains will assist result in a rise in demand for DOT.
Associated: Polkadot launches cross-chain messaging system to resolve blockchain’s bridge downside
New use circumstances
One notable use for DOT that has been rising in reputation in latest months is liquid staking and minting stablecoins through the use of crypto belongings as collateral.
DOT can now be transferred to the DeFi-focused Acala parachain and deposited in its liquid staking contract in alternate for LDOT, which might then be used as collateral to mint aUSD, the native decentralized stablecoin of Polkadot and Kusama.
This additionally means it’s time to unbond $DOT from @Polkadot for LDOT staking. Liquid DOT staking, $LDOT, is about to go dwell on @AcalaNetwork
– Increased yield
– Preserve incomes DOT staking rewards however get $LDOT to make use of in DeFi or to mint $aUSD
– On the spot unbonding
– Absolutely decentralized— Dan Reecer ️⚪️ (@danreecer_) May 3, 2022
DOT may also be utilized in varied DeFi functions together with yield farming, lending and borrowing. Because the introduction of cross-chain communication spreads all through the Polkadot ecosystem, further makes use of for DOT are more likely to emerge, particularly as parachains roll out elevated performance.
The views and opinions expressed listed below are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer entails threat, you must conduct your individual analysis when making a call.
