- Despite efforts, daily activity and revenue declined on the Polkadot protocol.
- Proposed changes and XCM expansion aimed to attract users, but there are still concerns about prices and staking.
According to Polkadot Insider’s 27 May tweet, Polkadot [DOT] has ranked fourth in token activity. Polkadot has surpassed networks such as Solana [SOL], Filecoin [FIL] and Litecoin [LTC] in this regard. Moreover, over $11.4 million worth of token incentives were provided on the network.
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Brilliantly, @Polkadot shines brightly at the top 4#Polkadot #DOT pic.twitter.com/gxfHAOc7PD
— Polkadot Insider (@PolkadotInsider) May 27, 2023
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Incentives not enough
Despite numerous token incentives, daily activity experienced a substantial 69.9% decline over the past 30 days, according to Token Terminal’s data. Concurrently, the revenue generated by Polkadot also fell by 25% within the same period.
These downward trends raise questions about the effectiveness of token incentives in attracting and retaining users.
Source: token terminal
To revitalize user engagement, proposals have been made to make changes to the Polkadot network. One of them includes a proposal to increase the number of validators. The suggestion entails a gradual addition of five new validators in each period until they reach 400.
This incremental increase is believed to strike a balance between security and network scalability. Core developers are supportive of such changes, further advocating for increased value and network participation.
Polkadot witnessed positive developments in other areas as well.
For instance, Polkadot’s cross-consensus message format (XCM) witnessed a notable expansion in the first quarter of this year, extending beyond transfers. The number of channels utilizing XCM increased by an impressive 60%.
This growth indicates the growing adoption of Polkadot’s interchain communication protocol, potentially fostering greater interoperability and functionality within the network.
Source: Messari
Looking at DOT
Despite efforts to drive adoption, the price of Polkadot’s native token, DOT, has continued to decline in tandem with its trading volume. Over the last month, DOT’s volume fell from 250 million to 90 million.
Realistic or not, here’s DOT’s market cap in BTC’s terms
This trend aligns with the prevailing negative sentiment surrounding the token, as the crypto community holds limited expectations for a rapid price recovery.
Source: Santiment
Moreover, stakers have displayed dwindling faith, with only 45.3% of circulating DOT being staked, according to Subscan’s data. This reduced staking participation raises questions about the confidence of token holders in Polkadot’s future prospects.
Source: Subscan
