- Polkadot published a new update addressing the "Utility Token Trilemma," explaining Polkadot's sustainability by design.
- Polkadot's clear governance process and platform design, maximizing social output.
- Analysts set a target of $100 for DOT, based on a trend noted ahead of the previous price rally in the altcoin.
Polkadot is the Web3 utility token that is sustainable and offers holders stable and relatively higher returns. Analysts have a bullish outlook on DOT as the first Parachain slot auction.
Polkadot addresses the Utility Token Trilemma
The first Parachain slot auction is underway on the Polkadot network. The decentralized Web3 token is preparing for a multi-chain future with its Parachain auctions.
Polkadot offers a range of services that include Parachain slots with shared security and technological means to communicate within the ecosystem.
Polkadot is a decentralized token where the protocol does not fix the price of the service but is rather competitively determined by users. Since the ecosystem uses the native token DOT in crowd loans and staking, Polkadot utility and adoption are rising consistently.
The Utility Token Trilemma says that only two out of three features can be held in equilibrium. The three features are bonding of users' tokens, constant token value and a constant value of the provided services.
Applying the trilemma to the Polkadot ecosystem, we see that the general setup of the Web3 token is stable. The token is not overvalued, and the value generation comes from Parachain auctions, lending, staking and increase in use cases.
Other decentralized platforms may engage in price-setting behavior by design. Shiba Inu recently implemented a burn policy similar to that of Ethereum. Projects resort to burning or pulling tokens out of circulation permanently to drive the token's price higher.
On the other hand, DOT relies on increasing utility by maintaining equilibrium and offering high value to token holders.
Cryptocurrency analysts have evaluated the DOT price trend and predicted a rally to $100 based on the altcoin's performance in previous cycles.
A pseudonymous cryptocurrency analyst @Hayess5178 accurately predicted the DOT price rally a week ago. The analyst believes that the DOT price could hit $100 over the next week.
$DOT #Polkadot is in price discovery.— Simon Hayes (@Hayess5178) November 5, 2021
Is it possible it could have a go for $100 over the next couple weeks ? I think it's quite possible with #parachain auctions starting on the 11th. Look at this weeks candle, would only take another 2 or 3 of the same.#bitcoin #ethereum https://t.co/hYtbwEtD2d pic.twitter.com/tfglWs1aDY
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.