Peas (CCC:DOT-USD) is an eighth-ranked $ 38 billion market-capitalization cryptocurrency, according to CoinMarketCap.
DOT recently completed its first parachain equity loan auction. As a result, the DOT crypto is likely to increase over the next year as this parachain app launches its business.
I have already written about parachain auctions on the Polkadot network as well as their deflationary effect on the DOT crypto supply. Now a big auction is now over and Polkadot’s mainnet will be leased to the winning parachain.
As a result, the DOT crypto has a chance to advance over the next year or so. It peaked earlier this month on November 4 at $ 55. But now it’s just over $ 35. While the DOT crypto is far from its highs this month, it is possible that as the parachain starts operating on the Polkadot mainnet, the value of the crypto could start to rise again.
Where are things with Polkadot?
Acala (CCC:ACA-USD), a decentralized finance (DeFi) protocol, announced that it had won the first auction on the Polkadot platform. It raised 32.5 million DOT, worth approximately $ 1.28 billion, from 24,934 contributors via an initial coin offering (ICO).
The ICO was in fact structured as an equity loan to the Acala network, which locks up investors’ capital for two years and pays them interest on ACA tokens.
After two years, Acala has to repay the principal. He could then make an ACA token sale. combined with its own cash reserves obtained through its DeFi protocol on Polkadot.
Acala won the auction by outbidding Moon Beam (CCC:GLMR-USD). Moonbeam has actually raised $ 1.36 billion, according to Cash, more than Acala’s $ 1.3 billion. But Acala accessed 81,000 digital wallets that took out their equity loans, and their offerings “were ahead 63% of the time.”
This is apparently how the winner of the auction was chosen. The article in Cash said the two parachains were neck and neck on several occasions. The “candle auction” process, however, prevents last minute spikes and games.
Later, Polkadot announced on November 18, the first six auction winners, including Acala, will be “integrated” into the mainnet on December 18. This implies that until December 18 inclusive, the DOT crypto could start to rebound.
What to do with DOT Crypto
Analysts now believe Polkadot is at a critical inflection point. For example, Cryptography briefing magazine wrote several days ago that the price of DOT crypto is at a technical high level.
Additionally, the second round of auctions will begin on December 23 and run every two weeks until early 2022, according to Cryptography briefing.
After winning the first Polkadot parachain auction, the Acala network has big plans, according to Cryptography briefing. It hopes to become the first DeFi application on the blockchain / internet. It intends to introduce an automated market maker, liquid DOT crypto staking, and a decentralized stablecoin called “aUSD”.
DOT crypto staking will allow people to donate their Polkadot tokens in order to generate interest, but will also have the option to liquidate them from the smart contract.
As there was fierce competition for the Polkadot mainline lease, this is a good sign. This means that there is a strong demand for its blockchain platform. Moreover, the fact that so much money was raised for the project is also a good sign. Finally, with so many DOT crypto tokens stuck for two years, the price of DOT crypto could rise.
As of the publication date, Mark R. Hake does not hold any position in any of the titles mentioned in the article, either directly or indirectly. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.
Mark Hake writes about personal finance on mrhake.medium.com and run the Total Value of Return Guide, that you can consult here.