Polkadot's Price Surge: How Referendums are Shaping Its Future

Source: Vladimir Kazakov - Adobe Stock

• Polkadot has had a stellar few weeks and has held its momentum even when other cryptos waned, and is now 15% higher than a week ago, trading at $6.8.
• The Polkadot eco has been on a transformation in recent days as the community casts votes on major changes, including one referendum that changes the auction schedule.

Price rises in the crypto market are mostly catalyzed by speculations, airdrops, and partnerships with traditional players. However, some projects are led by intrinsic growth and continued transformation and improvement. One of these is Polkadot, an eco whose unceasing improvements are now spilling over into price action for its native DOT token.

DOT trades at $6.83 at press time after dipping over 5% from an intra-day high of $7.3. Investor activity is still high, however, with the trading volume rising 13.2% to hit half a billion dollars. Over the past week, it has gained 15% despite an overall market correction and in that time, it has set a weekly high of $7.6, its highest price since February this year.

The crypto’s 34% gains in the past month have seen it rise on the charts to take the 12th spot ahead of major projects like the high-flying Polygon, Chainlink, and Shiba Inu.

DOT’s price action could continue, with some indicators showing that investor interest in the token remains high. On Binance, the token’s funding rate has been on the green all week, and on the derivatives market, its open interest has been surging. Open interest is the total number of outstanding derivative contracts that have yet to be settled and the higher it is, the higher the liquidity for a contract.

Polkadot Pushes for Improvement

While the price has been surging, the Polkadot eco has been working on improving the platform which offers decentralized blockchains known as parachains.

Polkadot makes changes through the use of referendums in which the community gets to vote for or against a proposal. One of the ongoing referenda, number 335, seeks to change the auction schedule for 2024.

In Polkadot’s eco, the sidechains, known as parachains, connect to the main Polkadot chain. Any project that wants to develop its application on a parachain is required to lease a slot on the relay chain via an auction in which the project locks up a certain amount of DOT tokens. The project can lease the chain for up to 96 weeks, or close to two years, with the option of renewal.

Proposal 335 seeks to “establish a defined schedule for the next year’s Lease Periods 16 and 17, each consisting of seven auctions, taking into consideration the potential integration of Agile cortime. If Agile cortime is successfully integrated before the planned auction dates, the proposal suggests the option to cancel the remaining auctions.”

This referendum goes to solve the challenge of projects interested in the relay chains missing out as they get scooped quickly. According to one source, they could wrap up as early as April next year, and if all the current relay chain holders renew their lease—which they are widely expected to—there will be no slots for any new projects.

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