Polkadot is not performing. But, in all fairness, most of the market isn’t at the moment. In the top 100 by market cap, you need to look with a light for any signs of green.
So, is Polkadot undervalued, or is it the end of the line? Should you jump this sinking ship, or is this a great time to fill your bags with $DOT at great discounts? What if I tell you that the Polkadot team has been working hard in the background? 4 Maybe it is indeed time to start filling those $DOT bags. So, let’s find out what’s cooking at Polkadot.
RWA on Polkadot
Two major new features are happening at Polkadot. For starters, there’s its entry into RWAs (Real-World Assets). The second big step is the JAM whitepaper. That’s effectively Polkadot 2.0. More on this shortly. So, let’s start with RWAs.
The idea behind RWAs is that you can tokenize any real-world asset. So, you turn it into an NFT on-chain. To refresh your memory, earlier this year, BlackRock started to focus on RWAs. BlackRock is one of the biggest global investment management companies. So, if they go all-in into RWAs, that’s something you want to pay attention to.
Source: X
Now, predictions are that by 2030, the US stablecoin market could hit $3 trillion. However, the RWA market could hit between $10 to $16 trillion by that date. In a best-case scenario, we’re looking at $68 trillion. It all depends on whose prediction you check. But this gives you an idea of the RWA potential. Before the current market went sour, RWA projects were recording big price increases. I expect that to come back once the altcoin season starts again.
So, what are some RWA markets? Well, in general, you can tokenize anything. However, the most common markets are in:
- Real estate.
- Stocks.
- Commodities.
- Precious metals.
- Art.
- Government treasuries.
- Corporate bonds.
Source: X
So, they range from straightforward assets to more complex. A simple sample remains real estate. Many of us can’t afford a $1 million house. However, when you fractionalize the asset in 1,000 or more parts, we can afford a part of this real estate.
Tokenization reduces counterparty risk. In turn, this makes it more cost-effective. As a result, it reduces admin and security costs. At the same time, an asset’s productivity increases. There you have the main reasons why tokenization should grow that much.
RWA Projects on Polkadot
There are already quite a few RWA projects live on Polkadot. So, let’s take a look at some:
1) Centrifuge ($CFG)
Centrifuge is one of the RWA OG projects. It tokenizes private credit. Centrifuge already financed $604 million in loans and tokenized 1418 assets. Its TVL grew by 30% YoY. Their TVL is currently at around $275 million. You can find their protocol in Polkadot’s and Ethereum’s DeFi sector. It bridges the TradFi and DeFi worlds.
2) Xcavate
Xcavate tokenizes real estate. It wants to bring real estate to a larger group of people. It does this by making access to it easier. For example, it offers fractionalized real estate.
A token should launch later this year, together with their mainnet. It will have features in place that will confirm the existence of the property and if its price is fair. There will also be a marketplace for their real estate listings.
Source: X
3) Phyken Network
Phyken Network is active in the energy market. This is also an interesting market with potential. Phyken will offer GRWAs or Green RWAs. This should reduce fossil fuel consumption.
Green and renewable energy is, for example, wind, solar, Biomass, or geothermal energy. Their mainnet and token should launch later in 2024.
4) Energy Web ($EWT)
Energy Web tokenizes green and renewable energy assets. It’s a non-profit organization. It wants to maximize the value of clean and distributed energy resources. The platform gained the trust of some energy giants like Shell, T-Mobile, and Deloitte.
Polkadot 2.0
And this brings me to Polkadot 2.0. Officially, that’s the JAM whitepaper. So, what does this bring to the table? However, keep in mind, It will take some time to integrate all the new features. It includes 3 main features for the first upgrade.
- Async Backing
Without getting too technical, it boosts the parachain throughput and efficiency. Performance goes up by a factor of 10. Blocks become 4x bigger and will take 6 seconds instead of 12 to produce. This allows for:
- Higher transaction volumes.
- Optimized consensus.
- Greater flexibility.
So, it allows for faster transactions. For example, it allows for more apps that need this. Like gamers don’t want games to be slow. Traders can use this for arbitrage and experience less delay between confirmations of their trades.
- Agile Coretime
This offers an improved dynamic and flexible resource management. It eliminates the need for long-term slot auctions. This lowers the barrier to build on Polkadot. Devs can buy this coretime on-demand or in bulk up to 28 days in advance. It also uses resources more efficiently. As a result, users will see more stable fees, without spikes. It can also lower transaction costs.
- Elastic Scaling
This allows parachains to scale dynamically. It enables higher throughput and faster transaction processing. It improves performance and reduces costs for projects. Furthermore, by improving the speed of Dapps it also lowers costs for users. So, all three features supplement each other. So, Polkadot 2.0 brings 3 main positive options:
- Developers — It offers a more adaptable and cost-effective environment for building Dapps
- Enterprises — Provides the scalability needed to handle large volumes of transactions and users.
- Ecosystem — Encourages broader adoption and innovation within the Web3 space.
This should bring fresh blood and energy into the Polkadot ecosystem. So, what are your thoughts on Polkadot now? Are these the new features that will improve the chain and its ecosystem? Let me know in the comments how you see Polkadot develop from here.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted risk tolerance levels of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
