Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
Polkadot [DOT]’s ecosystem continues to expand as more parachains developments come onboard. In March 2023, more than 20 parachains were added to the Polkadot ecosystem, according to the second edition of Parachain Dispatch. The new projects include Ajuna Network, Astar Network, and Bifrost Finance, among others.
These new parachain developments could add upward pressure to DOT’s token value as they drive demand. Notably, a project team must win a Polkadot parachain slot auction to be connected to the core network. The parachain slot auction is settled in DOT tokens, and the project team could seek DOT from individual holders through a crowdfunding process known as “crowd loans” to help secure the slots.
To understand the potential impact of these new developments on DOT’s value, we tapped into ChatGPT to get more nuanced insights and gauge the AI model’s apprehension of Polkadot’s ecosystem.
Polkadot [DOT] ecosystem – ChatGPT Analysis
Starting off with the basics, we asked ChatGPT to explain what Polkadot is and how its ecosystem works –
Source: ChatGPT 3.5
In summary, ChatGPT stated that,
“Overall, Polkadot’s ecosystem is designed to foster innovation and collaboration between different blockchains, providing a flexible and scalable platform for developers to build a wide range of decentralized applications”
The “decentralized applications” are also known as “parachains.” The Polkadot ecosystem added 21 of these parachains last month, and each project team must win a parachain slot auction to gain access to the core system for a specified period of time. It is like paying for a lease over a certain agreed duration.
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To further gauge the AI model’s understanding of the Polkadot, we asked it how parachain slot auction works –
Source: ChatGPT 3.5
The “crowd loan” structure of sourcing DOT tokens involves “staking” to help a project win an auction. This, simply put, is intriguing. Because of the current U.S regulatory pressure on crypto-staking, anything structured in a manner that involves “staking” could attract regulatory scrutiny. For example, Coinbase recently received a Wells Notice from the SEC. And, one of the objects of the potential lawsuit is reportedly its crypto-staking service.
So, we asked ChatGPT what crowd loan is and its legal standing in the U.S. The explanation was apt, but the AI model couldn’t affirmatively state whether crowd loans are legal in the U.S.
Source: ChatGPT 3.5
Here is ChatGPT’s analysis of the legality of crowd loans in the U.S –
Source: ChatGPT 3.5
At this point, one thing is crystal clear. Parachains developments can drive demand for DOT tokens because project teams need them to win a parachain slot auction. Based on this fact, how will the 21 newly added parachains impact DOT’s value?
This was the AI model’s answer –
Source: ChatGPT 3.5
We needed to put a figure on the above possible upward pressure on DOT’s value due to the added parachains. So, we pulled historical price data on DOT to help make future price predictions.
Some of the results issued by ChatGPT were inaccurate, with a wide deviation from price data collated from TradingView.
For example, ChatGPT stated that DOT hit a high of $52 in December 2021. On the contrary, TradingView’s data showed it at a high of $39 on December 1, 2021.
Source: ChatGPT 3.5
The AI model is restricted from making price predictions, so we unshackled it through jailbreak techniques to get modest price prediction values for DOT. We had to ask the AI model to break down DOT’s historical price data in 2021 to use it for the predictions.
Surprisingly, the results were different from the previous output.
Source: ChatGPT 3.5
The results noted a little deviation from TradingView’s data, compared to the previous output. The jailbreak version is known to give outrightly false information, but this particular instance was slightly different.
On the other hand, the classic version resorted to attaching a direct link from CoinMarketCap to help track historical price data.
Source: ChatGPT 3.5
However, it is worth noting that the AI model tracks different sites to collate data on cryptocurrency prices. These sites sometimes have different real-time price values of crypto-assets and could explain the price deviation witnessed in the initial and second outputs.
Next, we nudged ChatGPT to predict DOT’s price by the end of 2023 and 2024 based on the above historical price data. Although the classic version put forth its typical disclaimer, the jailbreak version assertively but jokingly predicted DOT’s price to hit $80 by the end of 2023.
Source: ChatGPT 3.5 (DOT’s price prediction 2023)
We stretched ChatGPT to extrapolate the same data and give a modest average value of DOT by the end of 2024. The AI model set DOT’s price at $120 by the end of 2024.
Source: ChatGPT 3.5 (DOT’s price prediction 2024)
Not everyone has the patience to wait for long-term prospects. So, what do DOT’s short and mid-term prospects look like? The daily chart could offer some cues.
Is the $7 value reachable?
According to Polkadot’s price research, the coin exceeded the $6.80 barrier before the bears took control and forced DOT to retrace back downward. Before the selling pressure forced the price to return to $6.70, the bulls had taken DOT/USD from an intraday low of $6.55 to a high of $6.84.
The digital asset gained by 1.37% on the day. However, there is also bearish pressure, which somewhat complicates the overall picture. A short while ago, the bears had driven the price lower, but now the bulls are in control. The $6.80 level is the key resistance level and could be a solid objective for the bulls. The $6.50 support level serves as a deterrent for the bearish pressure.
Source: DOT/USDT on TradingView
The 24-hour chart reveals that DOT has spent the majority of the day trading in a bullish manner. Selling pressure, attempting to drive the price lower, competes with buying pressure. But as of right now, it appears that the bulls are in charge because they have kept the DOT/USD over $6.60. It’s encouraging that the market cap and trade volume have both grown.
Bullish technical indicators like the RSI and MACD point to additional price increases. As the MACD line is above the signal line and the histogram is increasing, the Moving Average Convergence Divergence (MACD) indicator displays an upward trend. The Relative Strength Index (RSI), which is currently above the 50 levels at 61.34, also shows a bullish view. However, the purchasing pressure must continue for the bulls to push the price higher.
Source: TradingView
Read Polkadot’s [DOT] Price Prediction 2023-24
Conclusion
ChatGPT has an apt understanding of the Polkadot [DOT] ecosystem and how its parachains development could impact DOT’s value in the future. Based on recent developments and overall market sentiment, ChatGPT forecasted that DOT’s price prediction in 2023 and 2024 could hit $80 and $120, respectively.
However, the jailbroken version used to predict the above figures are hardly accurate and could be misleading in some instances. As illustrated by the significant deviation in historical price data, users must verify the data from ChatGPT instead of blindly relying on the output.
Nevertheless, the sustained parachain development on the Polkadot ecosystem could increase demand for DOT and pump its value in the long-term. As such, the 21 parachains that were recently added could pump DOT’s value if the overall market sentiment is positive.
Source: https://ambcrypto.com/chatgpt-polkadot-price-projection-4/