Both Bitcoin and Ethereum are rising, so why isn’t Polkadot following the trend?

Today, Biden finally defeated Trump and became president as he wished, and according to the latest news, Biden is considering hiring encryption expert Gary Gensler as a financial advisor.

If successful, it will indicate that the blockchain industry will gain unprecedented attention in the United States. In addition, Biden has announced that he will implement a plan to combat the new coronavirus epidemic in the near future. Assuming that the epidemic improves and the economy recovers next year, tens of thousands of participants will flock to the cryptocurrency industry.

Apart from the two cryptocurrencies Bitcoin and Ethereum, we should also pay attention to Polkadot.

Although it did not surge with the trend of the US election, we should never underestimate its value. You know, the market value of Polkadot token DOT is currently ranked eighth.

Polkadot founder Gavin Wood has a series of halos such as Ethereum co-founder, former Ethereum CTO, and author of "Ethereum Yellow Paper". He is a top developer on par with Vitalik Buterin.

Polkadot is a project that was launched in 2016. After four years of research and development, the mainnet was officially launched at the end of May this year. However, it has not yet achieved the "usable" status, and the most we can see is the news from the "Web3 Foundation".

In this case, why is its value underestimated? Let’s first understand the composition of Polkadot. Polkadot is a scalable heterogeneous multi-chain system. The Polkadot network can be divided into three parts: relay chain, parachain and transfer bridge.

Relay Chain: The main communication hub between parachains and the Polkadot “backbone”.

Parachains: Independent blockchains that run on top of the relay chain and are bound and reserved through auctions.

Bridges: Modules and contracts that connect to other blockchains, such as Bitcoin and Ethereum.

DOT is mainly used for governance, staking, voting, running nodes, etc. in the Polkadot ecosystem. There is no upper limit on the total amount of DOT tokens, and inflation is increased every year through the NPOS mechanism.

NPOS, or Nominated Proof of Stake, is a new POS consensus mechanism proposed by the Polkadot team. There are two important roles: validators and nominators. Both will receive benefits from DOT inflation, which is Staking benefits.

Simply put, a validator is a node that needs to run and maintain the node. A nominator is someone who votes for a node and does not need to run the node, but a portion of the staking rewards received by the nominator will be given to the voted validator to "compensate" for the cost of running the validator node.

Based on Polkadot, there are a series of applications such as Kusama, Acala Network, Stafi, Zenlink, etc. These applications have been maturing with the development of technology over time, are used by more and more people, and have attracted more and more developers to participate.

As the DOT token widely used in various Polkadot applications, with the cooperation and participation of the Web3 Foundation in the Wanxiang Blockchain Summit, developers' high-quality projects are constantly being introduced to the Polkadot public chain.

Perhaps the current price of DOT is not high enough to attract speculators, but long-term holding will not turn it into a worthless virtual currency, just like ETH now. Which DeFi application does not require ETH to pay gas fees for staking? Polkadot may bring us surprises at some point in the future.