Polkadot, the eighth largest cryptocurrency by market cap, has shown some promise with a sudden rise of over 10 percent Monday, as it hit a three-month high of $35.
It continued surging Tuesday, rising over 5 percent to trade at $36.36. The coin has risen over 12 percent in the last seven days, outperforming major cryptocurrencies like Bitcoin. The world's largest cryptocurrency by market cap, Bitcoin has declined over 10 percent in the last seven days, even as it was trading 3 percent higher above $46,000 Tuesday.
In the last 24 hours, the market cap of Polkadot has risen 5 percent to $36.6 billion, securing the eighth position, coming behind Solana, among the top ten cryptocurrencies. In comparison, the market cap of Bitcoin has risen by 2.5 percent in the last 24 hours.
After the significant fall last week, most cryptocurrencies are still mending their wounds, trying to recoup their losses. While Polkadot had also declined last week as Bitcoin crashed, it has shown a quick and strong recovery, just like Solana. Why? Let's find out.
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A change in the ecosystem
Analysts expect Polkadot's rally to continue and reach an all-time high of $50 in the near future. Experts are attributing this to updates in the Polkadot ecosystem, Polkabridge. It is a network protocol of Polkadot that acts as a bridge between Polkadot and other blockchains.
The polkabridge multi-chain automated marker currently runs on the Ethereum network, but developers are planning to launch its functionality onboard Polkadot soon.
This functionality gives people the ability to interoperate with various blockchains in the Polkadot network. The Polkadot decentralized app, which accommodates token swaps on the DOT platform to other blockchains, is launching shortly. This has people excited and has seen overwhelming support by the Polkadot community.
Parachains are project-specific, custom blockchains that can be integrated within the Polkadot network. Parachains gives developers the ability to customize use cases and feed them into the main blockchain. This is called the relay chain and is considered the biggest feature of the Polkadot network.
Polkadot's governance enables the start of parachains slot lease auction. Parachain slots are auctioned one by one.
Polkadot recently had its sixth parachain auction on September 8th. KILT, the developer team's protocol, won the slot. They were working on issuing claim-based verifiable, revocable, and anonymous credentials to the end-users. They are planning to have their seventh auction on September 15.
Cross consensus message format
Polkadot is working on cross chain-messaging passing which is a format for sending messages between different chains. It also enables transacting with chains whose transaction format is unknown. It can be a means for providing a long-lasting transaction format for wallets to use to create many common transactions.
Polkadot is going through many changes in its network ecosystem that have probably stirred us some excitement and led to its sudden rise. Time will tell how these systems are integrated and how they will affect the bottom line of Polkadot.
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(Edited by : Yashi Gupta)