Upgrade acceleration? Unlock expiration? Why did the Polkadot ecosystem soar collectively?

In any case, Polkadot, which once had unlimited expectations, seems to be getting an opportunity to introduce itself again.

Written by: Azuma, Odaily Planet Daily

This past weekend, the Polkadot ecosystem seemed to have taken over the torch of sector rotation, and all major projects experienced soaring prices.

As of publication:

• Polkadot (DOT) is temporarily trading at $9.05, a weekly increase of 35.6%;
• Kusama (KSM) is temporarily trading at $51.05, a weekly increase of 79.3%;
• Moonriver (MOVR) is temporarily trading at $31.22, a weekly increase of 386.2%;
• Moonbeam (GLMR) is temporarily trading at $0.543, a weekly increase of 65.9%;
• Acala (Acala) is temporarily trading at $0.12, up 56% in a week;
• Astar (ASTR) is temporarily trading at $0.105, down 13% in a week (it has actually increased, but it was launched on Upbit exactly a week ago, doubling under the “pickle effect”);
• Clover (CLV) is temporarily trading at $0.08, with a weekly increase of 52.5%.

So, what exactly drove this round of changes in the Polkadot ecosystem? We tried to find the answer from multiple angles such as fundamentals, secondary market structure, and market sentiment.

From a fundamental perspective, the most critical trend for Polkadot in the near future is undoubtedly the advancement of the 2.0 upgrade.

In the middle of this year, Gavin Wood proposed the idea of Polkadot 2.0 at the Polkadot Decoded conference, proposing to use Agile Coretime to replace the existing parachain auction mechanism, thereby optimizing the allocation plan of Polkadot block space and lowering the ecological entry threshold.

Previously, Agile Coretime has been successfully deployed on the Polkadot test network Rococo. According to the “Polkadot 2023 Annual Summary” recently released by Gavin Wood, Agile Coretime is expected to land on the pioneer network Kusama and the main network Polkadot in the first quarter of next year. The progress is significantly earlier than the community’s general expectations for the upgrade.

*Odaily Planet Daily Note: The general upgrade order of Polkadot is Rococo - Kusama - Polkadot. *

In addition to architectural upgrades, Snowbridge, the cross-chain bridge between Polkadot and Ethereum, is also expected to be launched in the first quarter of next year. This move will also significantly open up the liquidity barriers between the two major ecosystems and improve interoperability.

In terms of secondary market structure, the Polkadot ecosystem is about to usher in a key node in the near future - the token incentives provided by the first batch of winning parallel chain auction projects are about to usher in the final round of unlocking.

Starting in December 2021, Polkadot launched the first batch of parachain auctions that were called “much anticipated” at the time. Nearly 100 million DOTs were put into the auction, and the price of DOTs also touched ATH at that time. In the end, five projects including Acala, Moonbeam, Astar, Parallel and Clover won.

According to the auction incentive plan at the time, the own token incentives provided by the above projects will be unlocked in batches according to certain rules, and the unlocking period is about two years. For example, ACA and GLMR are unlocked in 96 weeks, and ASTR is unlocked in 22 weeks. Month to unlock.

Taking the BDOT auction product provided by Binance as an example, users who participate in the Polkadot parachain auction through this program can receive the last phase of ACA, GLMR and other incentives on December 27.

Therefore, from the perspective of the structure of the secondary market, the current mainstream tokens in the Polkadot ecosystem are also a key node where chips are fully exchanged in the early stage and circulation is about to be reduced in the later stage. This may explain the current collective changes in the ecosystem.

Judging from market sentiment, Solana’s surge has also led the market to re-examine the limitations of Ethereum (EVM) and the possibilities of heterogeneous public chains.

Looking back at the development of Polkadot in the past few years, you can criticize it for its lack of ecological activity due to the closed nature of the auction mechanism, or you can accuse it of always being criticized at the governance level, but you have to admit that Polkadot has always been well received in terms of development support.

As the market begins to shift expectations for a new bull market to breakthroughs in the application layer, Solidity’s ability to support the development of complex applications is being questioned, and Rust’s reputation is increasing day by day.

While the voice of “Solana flip Ethereum” is getting louder, some people must have noticed the smart contract language ink that Polkadot strongly promotes! Coming from the same source as Rust, it also has the potential to take over the explosion of the application layer.

All in all, the above analyzes are only some conjectures about the recent collective changes in the Polkadot ecosystem. What are the real reasons, or is it a combination of multiple reasons? No one can give an absolutely accurate answer.

In any case, Polkadot, which once had unlimited expectations, seems to be ushering in an opportunity to re-introduce itself to the market. We will witness the direction of the story in the new year.