Tech

Could Polkadot’s latest referendums have an impact on DOT’s price?

12 months ago
Bitcoin Ethereum News

Journalist

Posted:


  • DOT appreciated by more than 22% in just seven days 
  • Metrics suggested that the price uptrend might continue further 

Polkadot [DOT], in recent times, has submitted quite a few new proposals that have the potential to change how the blockchain works. One of the most notable ones is Referendum 335. While that happened, the token’s price charts managed to remain green, despite the wider market’s bearish condition.

Proposals and more proposals

At the moment, Polkadot is in the process of approving several new proposals that can have a larger impact on the blockchain’s future. The first one is Referendum 335. The proposal is aimed at a new auction schedule for Polkadot for 2024, which, as of now, is passing with 98.1% in its favor. The proposal also highlights the option to cancel the remaining auctions.

Another proposal is Referendum 340, proposing to open an HRMP channel between Asset Hub and Polimec. This proposal was also, at the time of writing, passing with more than 99% of votes in favor.

As per the official proposal,

“Opening a channel between AssetHub and Polimec is crucial as projects looking to fundraise on Polimec will do so in stable coins (USDT or USDC) or other tokens as decided by the project raising funds.”

How can these proposals affect DOT

These proposals, though they do not have a direct effect on price, play a major role in stirring up market sentiment, which in turn affects a token’s price. Therefore, AMBCrypto took a look at the current market sentiment around Polkadot.

As per our analysis, despite several proposals being under voting period, DOT’s overall popularity dropped last week, as is evident from its decline in social volume. Negative sentiment around the token also rose, with the weighted sentiment registering a sharp drop after spiking on 9 December 2023. 

Source: Santiment

However, it was interesting to note that though the token’s popularity dropped, its weekly price chart remained in the green. According to CoinMarketCap, DOT was up by more than 22% in the last seven days at press time.

At the time of writing, it was trading at $6.89 with a market capitalization of over $8.6 billion. In fact, investors’ interest in trading DOT was high as its volume remained up last week. Demand for DOT in the derivatives market has also been high, which was evident from its green Binance funding rate.

Source: Santiment

Read Polkadot’s [DOT] Price Prediction 2023-24

AMBCrypto then took a look at other derivatives metrics to better understand what to expect from DOT.

We found out that while the token’s price surged, its open interest also appreciated. Whenever open interest rises, it increases the chances that the prevailing price trend will continue.

Source: Coinglass

Source: https://ambcrypto.com/could-polkadots-latest-referendums-have-an-impact-on-dots-price/