Polkadot Enters Phase 2 with Referendum 1721 Pass

Polkadot’s Referendum 1721, approved in late 2023, initiates Phase 2 with significant network changes including abolition of parachain slot auctions and introduction of elastic scaling.

The upgrade aims to boost developer access, integrate EVM compatibility, and reduce DOT inflation to 3.1% by 2026, potentially enhancing market liquidity and attracting broader participation.

Polkadot Ref. 1721 Abolishes Auctions, Enhances Liquidity

Polkadot’s referendum 1721 marks a transition towards Phase 2. This upgrade abolishes parachain slot auctions, emphasizing liquidity enhancement and compatibility with the EVM environment. Key figures such as Polkadot founder Gavin Wood have historically championed transparent governance, integral to achieving these updates. As Wood stated, “Polkadot takes pride in being the only major network where all protocol decisions are made in a transparent, accessible, and resilient manner. (And it continues to deliver significant updates)” (source).

The cancellation of slot auctions signifies a major shift. Elastic scaling replaces this process, simplifying developer onboarding and integration. This move, aimed at enhancing operational efficiency, is also projected to reduce the DOT inflation rate to 3.1% by 2026, reflecting a careful approach to economic management.

The community and market response underscore the importance of this update. Analysts predict significant future growth for Polkadot. Gavin Wood’s endorsement of transparent governance further enforces community confidence in these outcomes, even as no direct statements specifically on referendum 1721 have yet been captured.

Polkadot’s Economic Shifts and Expert Growth Projections

Did you know? The Polkadot JAM upgrade in 2024 received a historic 99.998% support, showcasing strong consensus and community involvement, which set the stage for ambitious updates like Phase 2.

Polkadot (DOT) is experiencing economic shifts, with its current price at $4.27 and a market cap of $6.90 billion. The token’s price has shown a 3.19% increase in 24 hours and a 17.80% rise over 90 days, signaling potential resilience amidst market fluctuations, as per CoinMarketCap.

Insights suggest that the Phase 2 upgrade aligns Polkadot for future regulatory compliances and technological advances. Analysts anticipate sustained growth through increased developer engagement and network utility, supported by historical precedents suggesting effective community-led governance and resilience in tech shifts.