Polkadot, a protocol that allows public and private blockchains to connect and trade information, has reached a key place on its roadmap. Parachain auctions have kicked off, strengthening the use case for the cryptocurrency and emboldening the DOT community.
So far, one parachain has been added to Polkadot, the Shell parachain. Shell is an “empty parachain” that will later be upgraded to Statemint, which is where various tokens such as stablecoins, central bank digital currencies (CBDCs), and non-fungible tokens (NFTs) are deployed.
Polkadot’s first parachain has been added 🚀
Referendum 41 has passed registering the Shell parachain on Polkadot, to ensure block production, inclusion, and finalization. The Shell parachain has extremely limited functionality: it does not even have the notion of accounts.
— Polkadot (@Polkadot) November 5, 2021
There are over 100 projects that are looking to gain parachain status on the Polkadot network. This demand is bullish for the DOT price, as it signals that blockchain projects are interested in using Polkadot’s network to communicate with other chains on their way to potentially reaching wider-scale adoption. The DOT price is up about 2.5% in the last 24 hours to $53.75. Since October, the Polkadot price has risen by nearly 70%.
On-chain data analyst Matthew Hyland indicated on Nov. 7 that DOT saw its “highest weekly candle ever and closed above the final resistance,” concluding that the No. 8 cryptocurrency based on market cap “is ready to go parabolic!” Hyland expects the bulls to remain in control until year-end at least, fueling the Polkadot price to $250-plus in that period amid the “parabolic uptrend.”
#Polkadot had its highest weekly candle ever and closed above the final resistance
Polkadot is ready to go parabolic!!!🚀 pic.twitter.com/BVeBufAPsG
— Matthew Hyland (@Parabolic_Matt) November 8, 2021
The auctions gives projects the opportunity to begin the crowdloan process fueled by DOT tokens. The top three projects that are leading the auction at last check include DeFi hub Acala, Ethereum-based Moonbeam, which lets decentralized apps (Dapps) integrate with other blockchains, and Astar, which gives developers the ability to “add Plasma functions to their substrate chain” and “get scalable blockchains within a few minutes.”
These projects are not raising funds in the traditional sense of crowdfunding. Crowdloans are a way for crypto market participants to support the various projects that are looking to secure a parachain on Polkadot.
To contribute, participants start by “locking up their DOT for the length of the parachain lease in exchange for a reward, usually in the form of the project’s native token,” as explained by the Moonbeam Foundation. If a project doesn’t win, crowdloan participants can get their funds back.
If parachains are as bullish for blockchains as the DOT community expects, then Polkadot is only scratching the surface of its potential.