Polkadot price (DOT) hits a new high as parachain auctions reduce circulating supply

DOT price is targeting a new high and investors expect the ongoing Polkadot Parachain auctions to take price on a Kusama breakout trajectory in 2020.

This week, several projects are to take part in Polkadot’s first Parachain auctions, and the process tends to create buying pressure for DOT and at the same time gives ambitious blockchain projects a chance Cryptocurrency.

The ongoing parachain auctions on Polkadot follow the success of similar auctions on its sister network Kusama, where projects like Moonriver (MOVR) and Karura (KARR) have succeeded in securing a parachain position for the next year.

Top 5 projects on Kusama. generate profits | Source: Parachains

Parachain auctions on Kusama began during the broader downturn in the crypto market and helped the KSM price rebound from $ 148.85 on July 19 to a high of $ 457 as a large amount of tokens committed for auction were being executed is drawn to traffic.

Below are some of the Parachain auctions currently running on the Polkadot Network, and similar to the auctions on Kusama, the Polkadot price could break out as more and more DOTs are removed from circulating supply.

The 4 best projects take part in the Parachain auction on Polkadot. part | Source: Parachains

Acala

Acala (ACA) is a Layer 1 smart contract platform that was founded by Polkadot as a de-fi and liquidity hub. It is compatible with Ethereum and has built-in liquidity and pre-built financial applications including a trusted exchange, decentralized stablecoin (aUSD) and DOT liquid staking (LDOT).

Acala is the sister network of the Defi Karura (KAR) protocol that operates on the Kusama network and offers many of the same features.

DeFi has become one of the cornerstones of the crypto ecosystem, it is imperative to have a large, well established DeFi protocol that can attract liquidity and provide some profit to the owners; required for all networks.

Moonbeam

Moonbeam (GLMR) is a fully Ethereum compatible smart contract platform designed to simplify the process for multi-chain projects to get started on the Polkadot network.

Moonbeam’s sister network on Kusama is Moonriver, which offers the greatest reward of any parachains launched on the Kusama network.

Simplifying the process of cross-chain migration to Polkadot is an important problem that needs to be resolved in the current market, as high fees for Ethereum are still one of the main reasons why investors and developers are turning to cheaper alternatives like Polygon, Fantom and Avalanche switch.

If Moonbeam can help make this process easier for interesting projects, it could potentially help increase the overall performance and performance of Polkadot.

A star

Astar (ASTR) is a protocol that focuses on creating a scalable and interoperable infrastructure for Web3.0 by creating a platform that supports multiple virtual machines connecting Layer 1 protocols connected to the Polkadot network are compatible.

Astar is also able to act as a scalable smart contract platform which makes the Polkadot relay chain unable to support smart contracts.

Parallel funding

Parallel Finance (PARA) is a DeFi credit protocol and automated money market (AMM) that supports both Polkadot and Kusama-based assets and gives holders the ability to profit from their assets.

This protocol aims to bring more liquidity, profitability and capital efficiency to the Polkadot ecosystem and end users will be able to lend, invest and borrow assets from any supported network.

DOT and KSM prices rise before auctions

The ongoing parachain auctions for Polkadot are likely to put positive pressure on the DOT price as users buy to add to the crowdloan and this has successfully withdrawn large amounts of tokens in two years.

As can be seen in the graph below, the launch of Crowdloan on Kusama in June 2021 resulted in an increase in the KSM price while the DOT price movement calmed down.

4-hour chart KSM / USDT vs. DOT / USDT | Source: TradingView

Now the opposite is happening as the DOT price has surpassed KSM, a process that began in mid-September as the excitement about parachain auctions on Polkadot begins to grow.

With 11 parachain auctions scheduled to take place weekly from November 11, 2021 to March 10, 2022, there is a high probability that DOT’s price will continue to rise as long as demand for parachain access continues. .

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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