- Polkadot (DOT-USD) crypto is on the move up again after hitting a trough on Feb. 24 at $14.38.
- However, as of March 28, it’s still down 18.3% year-to-date.
- The launch of numerous parachains on its blockchain platform has been a success and will lead to more use cases.
Source: shutterstock.com/nurionstd
Polkadot (DOT-USD) is back on a run-up after hitting a trough price of $14.38 on Feb. 24. However, as of March 28, at $22.34, Polkadot is well off of its lows and moving back up.
The 11th largest cryptocurrency and blockchain platform has a $22 billion market according to coinmarketcap.com. However, it is still down by 18.2 % from its price as of year-end.
But it is growing in popularity and its use cases, and usefulness is growing.
Where Things Stand With Polkadot
Polkadot has now launched a series of parachains that operate on its blockchain network. Each parachain is kind of like its own blockchain and cryptocurrency that operates on top of the Polkadot network.
Polkadot is known as a “Layer Zero” protocol and parachains are the actual layer 1 blockchains. These parachains are now launching their apps and use cases on the Polkadot blockchain platform.
The first and largest parachain, Acala (ACA-USD) is now launching its core financial products, according to Cryptopotato magazine.
One way to monitor the popularity of a cryptocurrency is to watch the growth of its TVL (total value locked). That measures the amount of money that is tied up in digital wallets and staked contracts and other decentralized finance (Defi) assets.
In this regard, defiLlama.com shows that DOT crypto is growing quickly in TVL. As of March 28, the TVL shot up dramatically to over $4.11 billion in TVL. This represents a very percentage of its total market cap of $22 billion, or 18.68%.
This shows that investors are very interested in Polkadot.
Acala and Its New Stablecoin “aUSD.”
Recently Acala teamed up with eight other parachains and several supporting venture funds. They plan to launch a $250 million “aUSD” Ecosystem Fund.
The “aUSD” token stands for Acala’s stablecoin that was launched in February. This is a token that is designed to stay roughly equal to the U.S. dollar as it trades. It is meant to be a medium of exchange, and be a default routing asset for Polkadot’s blockchain and parachains.
With the launch of this new aUSD fund, Polkadot and Acala hope to encourage more use cases and apps that operate on the Polkadot blockchain.
What to Do With Polkadot
Now that the DOT token is moving off of its lows, it makes sense for investors that want to diversify among the top 10 or so cryptos to take a look at Polkadot. Polkadot is one of the few cryptos, like Ethereum (ETH-USD) and Cardano (ASD-USD) that built a layer zero blockchain platform. Other blockchains can build their specific use cases on top of them.
Polkadot is having very good success now with Acala and some of the other parachains. The dramatic rise in Polkadot’s TVL is evidence of that. The rise in TVL almost always accompanies a rise in the price of the blockchain.
Therefore, this seems to be a good entry point now for investors in Polkadot before it takes off as parachains like Acala gain usefulness and popularity. In fact, Polkadot is already moving higher as investors take note of its growing popularity and its TVL gains.
On the date of publication, Mark Hake did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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