A problem with the blockchains is their interoperability. This stops the blockchains from releasing their true potential. Blockchains can use their maximum power when they become interoperable with other blockchains. Interoperability allows blockchains to connect with one another and share data so that the experience becomes more immerse and better for the users.
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Polkadot is a sharding multichain protocol that is open source in nature. Polkadot allows the greater interoperability that allows the cross chain transfer of not only tokens but assets of any types. This allows greater use and allows different blockchains to connect with each other.
The protocol connects oracles, chains, networks with each other and allows them to share their data with one another through the help of the Polkadot relay chain.
Polkadot has four main components:
- Parachains: These are independent chains that have their own native tokens and are used for specific cases
- Relaychains: These are the core of the whole ecosystem that allows interoperability, governance and allows the shared security across different blockchains.
- ParaThread: They are similar to Parachains but are more flexible in their use.
- Bridges: This is a way for Parathread and Parachains to connect with external blockchains such as Solana and Ethereum.
Native token DOT
The native token of Polkadot network is DOT. DOT allows the operation and governance as well as formation of Parachains.
At the time of writing DOT is being traded at the price of $40.78. The price as had a decrease of almost 0.15% in the past 24 hours. Polkadot takes the 8th spot on coinmarketcap according to market cap and dominance (which is around 1.60%). The daily trading volume has decreased by 26.90% in the past 24 hours.
Long Term Investment
Dot is definitely one of the most bullish coins out in the market. Not just the chart, but the fundamentals of this project are plausible and is going to be one of the highly adopted project by different blockchains to allow interoperability.
With its Parachain auctions around the corner, investors are highly bullish on the project that it wouldn’t be long before the project doubles its current value.
Wallet Investors put Dot at around $176 in a five-year plan. But I think that this number is value small to what it can achieve in 5 years. Nevertheless, DOT has surely been a pearl to traders.