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Polkadot (DOT) is one of the blockchains that have strategically positioned themselves to take full advantage of growth opportunities in decentralized finance (DeFi). So far the project has enjoyed tremendous growth as evidenced by the price performance of its native cryptocurrency, DOT.
DOT is currently trading at $22.13 after rallying by 4.29% in the last 24 hours, further contributing to its bullish performance in the last 7 days during which the coin has so far gained more than 17%. The cryptocurrency’s price action has been favored by the cryptocurrency market’s bullish outlook in the last three weeks. Before that, DOT experienced a massive bearish downturn that saw it drop from an all-time high of$49.78 in May to its recent low of $10.37 in July.
DOT currently looks like it has some more potential upside considering that it is now closing above the 99-day moving average, confirming the strong uptrend. This is also supported by the strong buying volumes that the cryptocurrency has experienced in the last 3 days and the RSI currently shows that it recently slipped below the overbought price level.
Why Polkadot still has a lot of potential
Polkadot is currently the 9th biggest cryptocurrency in terms of market cap which is presently at $21.78 billion. It was able to achieve that by leveraging its robust blockchain to attract DeFi projects, thus unlocking a lot of organic growth, which means that DOT’s price is not just based on the overall market direction.
Polkadot is one of the blockchains that have focused heavily on network interoperability. This means it can connect multiple blockchains and this has turned out to be an attractive feature for developers who wish to deploy their DeFi platforms across multiple blockchain networks.
There is no perfect blockchain network in existence and there is always a network that excels at one thing more than its rivals and is limited in other areas compared to another network. This is why some DeFi platforms opt to launch on two or more blockchains so that they can tap into the benefits of the different networks. For example, a DeFi platform can leverage the robust smart contract capabilities and other features on the Ethereum blockchain while Taking advantage of Polkadot’s faster transaction speeds and security.
Polkadot also offers a powerful tool known as Substrate which makes it easier for developers to create a blockchain network from the ground up. This is another growth area that can provide more value for the network and its native token in the future as the demand for blockchain technology continues to increase.
Polkadot’s biggest advantage over many of the blockchain networks currently in existence is that it does not focus on competing but rather working together with the competition through parachains. Polkadot should continue to unlock more value and utility especially now that crypto adoption is in the fast lane, particularly with increased demand for DeFi platforms. It might still be a good idea to have DOT in your portfolio even at its current value considering the potential upside, as well as the fact that it can provide some passive income through staking.
