The market capitalization of the cryptocurrency segment crossed $2 trillion at the end of March. It has attracted increased interest from retail and institutional investors across the globe. Cryptocurrencies like Bitcoin and Ether continue to be more popular. However, some other cryptocurrencies are also expected to rally this year. One of these is Polkadot (DOT). It is an altcoin and the price of one token is around $20. Its market cap is a little over $20 billion. It is expected to accelerate this year.
Rohas Nagpal, author of the Future Money Playbook and Chief Blockchain Architect of the Wrapped Asset Project Polkadot, explained that a common blockchain Not there. It is an ecosystem of interconnected blockchain shards called parachains. Parachains are application specific and are secured by a single base platform called a relay chain. They can also connect to external networks such as bridges. Polkadot Relay is an important part of the chain and is responsible for the security, consistency and cross-chain interoperability of the network. It also contains Polkadot’s consensus and voting logic.
Polkadot was conceptualized by Ethereum co-founder Gavin Wood, who is also the inventor of the Solidity smart contract programming language. The native token of the Polkadot network is DOT and serves three purposes, governance, staking and bonding.
One of the great features of this altcoin is that it has a set of validators to secure multiple blockchains in its network. Transactions associated with this are spread over multiple parallel blockchains. Each parachain has a different function and use case for the Polkadot ecosystem. The first 11 parachains of Polkadot are live. These parachains have bonded 126 million DOTs for a two-year lease period, which is 11 per cent of the total supply. In addition, it has the lowest carbon emissions compared to proof-of-stake blockchains such as Algorand, Avalanche, Cardano, Polkadot, Tezos, and Solana. Polkadot uses a hybrid consensus model that separates the finality gadget from the block production mechanism. In DOT, good validators are rewarded and those who make mistakes have to lose stake.