- Polkadot development activity has reached an all-time high.
- The price of DOT, on the other hand, continued its downward trend as interest fell to an all-time low.
Development activity on the Polkadot layer 0 blockchain [DOT] has reached an all-time high, while interest in its DOT coin continues to fall, data from Token Terminal has revealed.
— Token Terminal (@tokenterminal) July 27, 2023
Read Polkadot [DOT] Price Prediction 2023-24
Development activity is an important metric because it offers insight into a crypto project’s commitment to building a working product and the likelihood of delivering new features. Additionally, high development activity often reduces the possibility of the project being an exit scam.
This metric tracks the number of unique contributors to development activity, the count of all events for a project, and the number of unique contributors to GitHub activity.
According to data from Token Terminal, over the past year, the number of core developers on Polkadot has increased by 39%.
What did Polkadot do?
The increase in development activity on the Polkadot network this year can be attributed to the two significant technical upgrades made to the Layer-0 chain over the past few months – the release of Polkadot v0.9.43 and the release of XCM v3 .
In January, after 15 months of development, Polkadot launched the third iteration of its cross-consensus communication (XCM) format. The V3 upgrade introduced a number of new features, including support for Cross-Chain Message Passing (XCMP), which enables the transfer of data and tokens between different blockchains.
After exactly 15 months of development, @polka dots Version 3 of XCM is merged. This allows for bridging, cross-chain locking, swaps, NFTs, conditionals, context tracking and more. https://t.co/dqcLXOmDa9
— Gavin Wood (@gavofyork) January 17, 2023
Additionally, Polkadot’s v0.9.43 upgrade was released on June 20 and introduced two new features to the blockchain network. These are database migrations and runtime migrations. Database migrations allow upgrading the database to the latest state, while runtime migrations allow upgrading the runtime of a parachain.
Polkadot version 0.9.43 was released with MEDIUM upgrade priority. https://t.co/l8bOvJjPtb
—Bill Laboon | Web3 Foundation (@BillLaboon) June 20, 2023
Interestingly, despite these attempts to improve the effectiveness of Polkadot to increase network user activity, the number of active addresses in the chain has dropped. As a result, transaction fees have been on a downward trend over the past few months.
According to Token Terminal, daily transaction fees paid to use Polkadot have dropped 15% over the past six months. During this period, the protocol’s revenue from fees was also affected.
DOT deals with negligence
At press time, DOT traded hands at $5.24, seeing a 21% drop in value over the past six months. Things looked bleaker on the daily chart, with key indicators signaling a sharp decline in the DOT market.
For example, a new bearish cycle was underway at press time and has been since the beginning of the month.
According to the alt Moving Average Convergence Divergence (MACD) indicator, the trend line (orange) intersected the MACD line (blue) in a downtrend on July 10, indicating that the bears have regained control of the DOT and have since started distributing their DOT holdings.
Additionally, the coin’s Chaikin Money Flow (CMF) was positioned below the midline at -0.04. Generally, a CMF value below the zero line is a sign of market weakness as it signals an outflow of liquidity and often precipitates further price declines.
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Interestingly, despite increased coin distribution since the beginning of the month, an assessment of its open interest revealed a slight increase.
However, a closer look at DOT funding rates on cryptocurrency exchanges revealed that most trade positions opened last month were against the price of the coin.