© Reuters Will the price of Polkadot (DOT) reverse course now that chain messaging is available?
Evolution within the DOT ecosystem has been slowly unfolding over the past year and a half; The work done by the developers is finally beginning to bear fruit with the end of Parachine Auctions and the launch of the first series on the mainnet.
The next stage of interoperability within the ecosystem is set to take off now that cross-chain functionality is about to begin. This next step will allow Polkadot-based parachute to communicate with each other and move assets between chains.
After passing community vote, v0.9.19 has been enacted on Polkadot. This upgrade included a batch call upgrading Polkadot’s runtime to enable parachain-to-parachain messaging over XCM and upgrading #Statemint to include minting assets (like NFTs) and teleports. pic.twitter.com/uqIB5di2Q1
— Polkadot (@Polkadot) May 4, 2022
Here’s a look at what the launch of the XCM messaging system means for the price of the DOT; And the options now available to DOT holders and how this development is increasing its functionality within the Polkadot ecosystem.
Polkadot is not tied up at this moment ; The DOT had limited uses and was essentially isolated on its own network without much functionality. Its main functions included staking, governance, and contributing to the parachine crowd; Which helped reduce circulating supply but did nothing else to really stimulate demand.
The introduction of cross-chain communication enabled DOT transfers to different parachain networks and the number of use cases for the DOT token on parachains such as Moonbeam and Astar Network.
1/ $DOT is now live & usable in DeFi on Moonbeam!
Following this morning’s #XCM release to @Polkadot, Moonbeam has added xcDOT, an XC-20 representation of DOT on its parachain. https://t.co/gCXIqwlXWb
— Moonbeam Network (@MoonbeamNetwork) May 4, 2022
Data from TradingView shows that its price has been hit hard by a six-month downtrend in a market as its price is down 73% from an all-time high of $55 on November 4.
With the DOT now trading at a significant support/resistance level; It remains to be seen if the ability to move DOT across various parachains will help increase demand for it.
New Use Cases One of the notable uses of the DOT that has grown in popularity in recent months is liquid staking and minting of stablecoins using crypto assets as collateral.
The DOT can now be transferred to the DeFi-focused Acala parachain and deposited into a liquid staking contract in exchange for an LDOT; Which can then be used as collateral for the American coin, which is the original decentralized stablecoin of Polkadot and Kusama.
This also means it’s time to unbond $DOT from @Polkadot for LDOT staking. Liquid DOT staking, $LDOT, is about to go live on @AcalaNetwork
– higher yield
– Keep earning DOT staking rewards but get $LDOT to use in DeFi or to mint $aUSD
– Instant unbonding
– Fully decentralized
— Dan Reecer (@danreecer_) May 3, 2022
DOT can also be used in many DeFi applications including Lending and Borrowing. As the introduction of cross-chain communication is widespread throughout the Polkadot ecosystem, additional uses for DOT are likely to emerge; Especially with parachains posting increasing functionality.
To read more cryptocurrency news click on the link
See the original article