How Polkadot’s new referendums can impact DOT

• Polkadot’s successful referendum upgraded Bridge Hub for enhanced blockchain interoperability.
• There was declining interest in DOT staking despite high rewards and bearish price trend.

Despite the volatile nature of the cryptocurrency market, Polkadot [DOT] has persevered and made progress through its governance system.

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New changes

In a recent successful referendum, the upgrade of Bridge Hub to runtime v9420 was proposed and executed. The Bridge Hub serves as a vital communication and interoperability tool for blockchains within the Polkadot ecosystem.

It acts as a central hub, facilitating the smooth transfer of assets, messages, and data between different blockchains, enhancing the network’s overall functionality.

By ensuring that transactions and data can be received, understood, and utilized by other blockchains within Polkadot, the Bridge Hub enables compatibility and collaboration across different blockchain projects through cross-chain capabilities.

However, the impact of these changes on attracting new users to the ecosystem remains uncertain. The success of the new referendums will play a crucial role in determining whether the protocol can achieve sustained growth in the future.

Polkadot’s high staking reward ratio might be an appealing factor for users. According to Polkadot Insider, DOT has outperformed other cryptocurrencies in terms of staking rewards, with a reward of 14.54% for staking DOT.

Despite this, interest in DOT staking has declined, as indicated by a 0.35% decrease in the number of stakers on the Polkadot network, according to Staking Rewards’ data.

Source: Staking Rewards

Looking at DOT

In terms of price performance, Polkadot’s native token, DOT, has experienced a significant 9.43% decline since 1 June. The price action has exhibited a bearish trend, with an increasing number of lower lows and lower highs.

At press time, DOT is trading at $5.043 after experiencing some bullish momentum following a test of the $4.221 support level.

Realistic or not, here’s DOT’s market cap in BTC’s terms

Despite the presence of buyer momentum, indicated by a high RSI and a bullish picture painted by the CMF of 0.21, traders have continued to short DOT. The percentage of short positions against DOT has risen to 52.47% according to Coinglass’ data.

Source: Trading View

On the social front, there has been an increase in the social dominance of DOT over the past few days. However, the sentiment surrounding DOT remains negative, as evidenced by its falling weighted sentiment.

Source: Santiment