Polkadot (DOT) Market Cap Dips: Q3 Sees 16% Decrease In Value
07 November 2023 - 12:00PM
NEWSBTC
Polkadot (DOT), one of the prominent blockchain networks in the
crypto space, experienced a 16% decline in market capitalization in
the third quarter (Q3) of 2023, according to a recent report from
Messari. This decline came after a moderate downturn in the
overall cryptocurrency market during Q3, despite favorable court
rulings for XRP and Grayscale. The total crypto market
capitalization declined by 5.8%, with Bitcoin (BTC) and Ethereum
(ETH) falling by 7.5% and 10.0%, respectively. Polkadot Closes Q3
With $5.2 Billion Market Cap As reported by Messari, Polkadot’s
market capitalization closed at $5.2 billion, positioning it as the
13th largest crypto asset by market cap in Q3 2023 (currently
15th). Polkadot’s financial structure is based on a
weight-based fee model, which differs from the gas-metering model
in other networks, such as Ethereum. Transaction fees in Polkadot
are determined and charged before execution, with the calculation
comprising a weight fee reflecting computational resources, a
length fee based on transaction size, and an optional tip to
incentivize block authors. Related Reading: Expert Predicts
Date For Next Bitcoin Cycle High Of $130,000 In Q3 2023, Polkadot
generated revenue amounting to $94,000, representing a 3% decrease
compared to the previous quarter. Messari suggests that Polkadot’s
revenue tends to be relatively lower compared to its competitors
due to the network’s structural design. On the other hand, the
native token of Polkadot, DOT, serves three primary purposes:
governance, staking, and parachain bonding. During Q3 2023, the
staking percentage of DOT rose by 12% compared to the previous
quarter, reaching 49%. This increase led to reduced staking
rewards and a 12% decline in the annualized nominal yield to 15%.
According to Messari, the close alignment of Polkadot’s staking
rate with the ideal rate demonstrates the effectiveness of its
mechanism. Polkadot’s OpenGov Milestone The Polkadot treasury
supported various initiatives in Q3, including software
development, bounties, client upgrades, and community events like
meetups and hackerspaces. According to Messari, the
implementation of OpenGov on June 15 marked a significant
milestone, revolutionizing treasury management and enabling
concurrent proposals with distinct requirements. At the end of the
quarter, the Polkadot treasury held approximately 45 million DOT
($185 million). Furthermore, Polkadot has recently completed the
official release of Polkadot 1.0, marking the achievement of a
significant milestone outlined in the Polkadot whitepaper.
Related Reading: The Main Drivers Behind The 23% XRP Price Rally
Revealed The network’s codebase has been fully transitioned to a
repository managed by the community through Polkadot OpenGov and
the Technical Fellowship. The roadmap for the next iteration,
Polkadot 2.0, will be determined through community discussions and
consensus. Founder Gavin Wood has proposed ideas for
additional mechanisms to allocate Polkadot’s block space and for
creating treaty-like agreements between multiple blockchains called
“accords.” As of this writing, the DOT token has exhibited a
noteworthy upward trend since October 19, closely following
Bitcoin’s lead. Presently, the token is trading at $4,839,
reflecting a notable increase of over 16% within the past fourteen
days. Featured image from Shutterstock, chart from
TradingView.com
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