Market intelligence firm Messari recently released its third quarter (Q3) performance report for Polkadot (DOT), providing insights into the blockchain network’s development and financial metrics during this period. Polkadot Sees Strong Developer Engagement One of the notable findings from the report is the developer activity on Polkadot. According to Electric Capital, the network had approximately 2,400 monthly active developers in July 2024, with 760 classified as full-time contributors. This positioned Polkadot fourth among leading blockchain networks, trailing only Ethereum, Base, and Polygon. Furthermore, Artemis tracked an average of 630 weekly active core developers and 760 ecosystem developers during Q3, underscoring a vibrant development community. Related Reading: Bitcoin Price Alert: Expert Warns Of Upcoming 25% Drop, Timing And Trends Explained Polkadot also made significant strides in Q3 2024 with several key initiatives aimed at enhancing its ecosystem. The Decentralized Futures program, backed by a substantial $20 million fund and 5 million DOT tokens, has been pivotal in driving innovation. This initiative provided grants to various projects focusing on marketing, business development, governance, and technology. Notable projects supported include AirLyft, DotPlay, and BlockDeep Labs. Another critical development is the Cross-Consensus Message Format (XCM), a standardized messaging protocol that facilitates communication between different consensus-driven systems, including rollups. Daily XCM transfers averaged around 1,000, representing a 34% decline quarter-over-quarter (QoQ). In contrast, non-asset transfer use cases, referred to as “XCM Other,” experienced a 5% increase, averaging 200 daily transfers. Overall, total daily XCM messages averaged 1,300, reflecting a 29% drop QoQ. Despite these fluctuations, a significant portion of activity on the Polkadot network continues to occur through Polkadot rollups. DOT Market Cap Plummets 27% In Q3 In terms of market performance, DOT has experienced notable volatility through the year. From Q3 2023 to Q1 2024, DOT’s market capitalization soared by 150%, rising from $5 billion to $13 billion. However, in the subsequent quarters, including Q2 and Q3 2024, DOT retraced alongside the broader market, ending Q3 2024 with a market cap of $6.3 billion—a 27% decline QoQ. This drop also saw DOT’s market cap ranking fall from 14th to 15th, even as it remains the seventh largest base layer network. Transaction fees on the Polkadot chain have generally remained lower compared to competitors, attributed to the network’s structural design. In Q3 2024, transaction fees aligned with historical averages, totaling $84,000—a 44% decrease QoQ. Fees denominated in DOT also declined by 21% to 17,000. Related Reading: Institutions Just ‘Waiting To Buy Up’ Bitcoin, Says MARA CEO The Polkadot Treasury on the other hand, saw continued active usage, with 9.5 million DOT allocated for proposals, 7.4 million for bounties, and 2.5 million burned. A significant development was the approval of Polkadot Referendum 457 in Q2 2024, which diversified the treasury with USDT and USDC, enabling treasury proposals to be denominated in stablecoins. By the end of Q3 2024, the treasury balance stood at $122 million. Daily active addresses dropped to 6,200 (-26% QoQ), daily returning addresses decreased to 5,300 (-23% QoQ), and daily new addresses fell to 900 (-38% QoQ). In terms of immediate price action, the DOT price has traded at the $8 level for the past four days, and has since consolidated above it. The token has been one of the best performers since Donald Trump’s election on November 5, posting a substantial 96% gain in the monthly time frame. Featured image from DALL-E, chart from TradingView.com
The recent report released by the Polkadot Treasury for the first half of 2024 has raised concerns over an impending funding crisis. The report indicates that the Treasury’s assets, spread across multiple chains, have become increasingly complex and challenging to manage effectively. Decentralized finance (DeFi) researcher DeFi Ignas has analyzed the report, highlighting the Treasury’s limited runway of approximately two years at the current burn rate of $87 million every six months. Funding Concerns Mount For Polkadot Polkadot’s expenditure during the first half of 2024 paints a worrying picture. An extensive outreach program accounted for $37 million, aiming to attract new users, developers, and businesses. Additional expenses included $10 million on ads/sponsorships, $4.4 million on influencers, and $4 million on digital ads. Surprisingly, despite such expenditures, Polkadot’s visibility on social media platforms, including “Platform X,” remained notably low. Related Reading: Bitcoin Weekend Trading Takes A Siesta: Volumes Plunge To Record Lows The Treasury spent a total of $86 million in the past six months, managing $245 million (38 million DOT) in assets, with $188 million (29 million DOT) in liquid form. The burn rate indicates that the Treasury may face bankruptcy in less than two years. Polkadot’s token supply experiences a 10% annual growth, primarily fueling staking rewards. With a $10 billion market cap, stakers receive $1 billion per year, which significantly affects network security costs. However, a proposal to reduce inflation was rejected by 57% of the stakeholders, further compounding the Treasury’s financial challenges. New Governance Model The report reveals that direct fee revenue remains marginal for Polkadot. In 2023-H2, Polkadot generated 300,000 DOT through fees during a short-lived inscription campaign. Under regular conditions, fee revenue stabilizes at around 20,000 DOT per quarter. On the expense side, the report highlights a 2.4x increase in DOT spending compared to 2023-H2. Ambitious proposals and larger ask sizes contributed to this significant spending surge. Although the average DOT price rose, resulting in more value per DOT, concerns about the Treasury’s usage are mounting within the ecosystem. Related Reading: Dogecoin Could Eclipse $1 Mark This Bull Run, Predicts Analyst To address these challenges, Polkadot is moving towards a more structured approach. Executive bodies, such as bounties and collectives, are emerging to assume departmental roles within the ecosystem. These bodies are responsible for security, data research, core functionality development, network operation, marketing, and business development activities. The key question now is how to establish effective structures quickly to guide Polkadot toward success. The solution, according to the blockchain’s treasury, is to delegate more responsibility to these executive bodies. These bodies are made up of competent individuals who evaluate new proposals and deliver value. Collectives, similar to subDAOs, have OpenGov capabilities and sub-treasuries to facilitate their work. By leveraging these executive bodies, Polkadot can outsource operational issues and mundane tasks, allowing OpenGov stakeholders to focus on making critical decisions. The effectiveness and performance of the executive bodies are evaluated, and budget allocations are negotiated with OpenGov based on the results. At the time of writing, DOT is trading at $6.35, representing a price recovery of nearly 4% in the 24-hour time frame. However, the 17th largest cryptocurrency by market cap is still down 10% over the past month. Featured image from DALL-E, chart from TradingView.com
According to a Messari report, the Polkadot (DOT) blockchain protocol made significant progress in the first quarter (Q1) of the year in terms of market capitalization, revenue, and Cross-Consensus Message Format (XCM) activity, as well as a record increase in daily active addresses. DOT’s Market Cap Surges 16% QoQ During Q4 2023, Polkadot’s market capitalization experienced a notable 111% quarter-on-quarter (QoQ) increase, reaching $8.4 billion. Building on this momentum, Q1 2024 witnessed a further 16% QoQ rise, elevating the circulating market cap to $12.7 billion. Despite these gains, DOT’s market capitalization remains 80% below its all-time high of $55.5 billion, set on November 8, 2021. Related Reading: Friend.tech Token Launch Turns Into A Nightmare As Price Dives 98% In Q4 2023, Polkadot’s revenue also skyrocketed by 2,880% QoQ, amounting to $2.8 million. Per the report, this surge was primarily attributed to an exponential increase in extrinsics, driven by the Polkadot Inscriptions. However, revenue metrics for Q1 2024 declined significantly on a QoQ basis, with revenue in USD dropping by 91% to $241,000 and revenue in DOT decreasing by 92% to 28,800. It is worth noting that Polkadot’s revenue tends to be relatively lower compared to its competitors due to the network’s structural design. Polkadot’s XCM activity continued to show growth in Q1 2024. Daily XCM transfers surged by 89% QoQ to reach 2,700, while non-asset transfer use cases, known as “XCM other,” witnessed a 214% QoQ increase, averaging 185 daily transfers. The total number of daily XCM messages grew 94% QoQ to 2,800, demonstrating the network’s dynamic ecosystem. In addition, the number of active XCM channels grew 13% QoQ to a total of 230. Polkadot’s Parachain Network Soars To New Heights Q1 2024 marked a significant kick-off to the year for Polkadot’s parachains, with active addresses reaching an all-time high of 514,000, representing a substantial 48% QoQ growth. Moonbeam emerged as the leading parachain with 217,000 monthly active addresses, a solid 110% QoQ increase. Nodle followed closely with 54,000 monthly active addresses, doubling from the previous quarter. Astar on the other hand, experienced a modest 8% QoQ growth to reach 26,000 active addresses, while Bifrost Finance grew slightly by 2% QoQ to 10,000 addresses. However, Acala experienced a decline, with monthly active addresses falling to 13,000, down 16% QoQ. Notably, the Manta Network stood out among parachains in Q1 2024, with a significant surge in daily active addresses, reaching 15,000. According to Messari, this increase was fueled by the successful launch of the MANTA token TGE and subsequent listing on Binance, propelling Manta’s Total Value Locked (TVL) to over $440 million. Polkadot Price Sees Upside Potential Ahead In terms of price action, Polkadot’s native token DOT has regained bullish momentum following a sharp drop to the $5.8 price mark after reaching a yearly high of $11 on March 14. Currently, DOT has regained the $7.25 level, up 7% over the past week. However, DOT’s trading volume decreased slightly by 4.7% compared to the previous trading session, amounting to $320 million over the past 24 hours, according to CoinGecko data. Related Reading: Crypto Pundit Lists 4 Altcoins To Buy Once The Bitcoin Price Bottoms If the bullish momentum persists, Polkadot faces its first resistance at the $7.4 zone, which serves as the last threshold before a potential retest of the $8 resistance wall. On the other hand, the $6.4 support floor has proven to be successful after being tested for two consecutive days this week, highlighting its significance as a key level to watch for the token’s upward movement prospects. Featured image from Shuttestock, chart from TradingView.com