Polkadot: network continues to grow

A new report from cryptocurrency analytics firm, Messari, authored by Nick Garcia, demonstrates the continued evolution of the Polkadot blockchain.

Polkadot blockchain expands

Utilization of the Polkadot network has been steady quarter over quarter, with 436,000 users and 878 million DOTs transferred. 

Staking activity has been consistent with a range of 54% to 56% of total DOT staked. 

In addition, validators are evenly distributed with 95% of validators staking 1.8-2.6 million DOT. Polkadot spent 240,000 DOT ($1.7 million) in nine transactions. 

These are just some of the findings of Nick Garcia’s latest report, published by Messari, titled “State of Polkadot Q2 2022,” which analyzes the evolution of the blockchain network in Q2 2022.

Polkadot is a Nominated Proof-of-Stake (NPoS) blockchain network designed to support various interconnected, application-specific Layer-1 chains known as parachains. 

It currently occupies the 11th position among the most highly capitalized cryptocurrencies, with $7.74 billion in capitalization.

The report highlights how the native DOT token has fallen from $27 on Jan. 1, 2022, to the current $7. Despite this slump, mostly due to exogenous factors and a bearish market, the Polkadot network has continued to grow and innovate.

As an example of this continued evolution, the report cites the case of the $100 million donation made by billionaire Frank McCourt and his ethical technology initiative Project Liberty to build a decentralized social media blockchain with Polkadot that can store social media users’ data so they can own and control them.

The addition of Bitcoin to the Polkadot ecosystem

In August 2022, Interlay, a decentralized stablecoin network, launched the Bitcoin token, InterBTC (iBTC), on the Polkadot network to offer users the ability to keep BTC in their Polkadot wallet. 

Polkadot is a Proof-of-Stake (NPoS) blockchain network designed to support various parachains, which is a set of interconnected chains specific to applications such as Moonbeam, Astar, Clover Finance, and Acala.

All Polkadot parachains use Substrate, a blockchain development framework created by Parity Technologies, which allows blockchain developers to choose their own parameters that best suit their applications. 

Currently, as Messari’s report explains, 550 projects are relying on the network’s Substrate framework:

“There are 1,400 active developers building on Polkadot each month, representing a year-on-year increase of over 75%, which is more than any other Web 3.0 protocol save Ethereum.”

435,000 users used Polkadot in the second quarter of 2022. 

DOT cryptocurrency data

This means a 3.5% increase in total DOT, from 53% to 56%. Average DOT transfers per month were 293 million, up from 288 million in the first quarter of 2022.

Messari noted how Polkadot’s on-chain activity was consistent from the first to the second quarter, despite a tight macroeconomic climate, and that fundamental KPIs remained essentially stable.

DOT’s capitalization, however, compared to the first quarter of the year dropped 66%, losing $15 billion. 

Since November 5, 2021, the day of its all-time high, DOT’s capitalization has dropped 88%, from $57 billion to the current $7.7 billion.

In terms of utilization, however, the numbers remain stable: 

“So far in 2022, network usage remained consistent across Q1 (56k active and 92k new) and Q2 (77k active and 68k new), providing hope that Polkadot’s total number of users has stabilized.”