Why is the price of DOT so high (Why has the price of DOT fallen so much)?

Why is the price of DOT so high? According to data from Coinmarketcap, there are nearly 4 million addresses holding dottoken. Among them, more than 60,000 addresses account for over 50% of the total supply, worth over $500 million (approximately $700 million at the time). There are also over 200 million wallets using the project to buy and sell their tokens.

From the above chart, it can be seen that the trading volume of this cryptocurrency is considerable, despite the emergence of many altcoins in the market.

1. Bitcoin reached a high point of nearly $30,000 at the end of last year.

2. Ethereum has performed impressively this year, with over 20% of its gains coming from the prosperity and growth of DeFi.

3. The concept of “borderless blockchain” has been hyped, but these are “non-fungible assets” based on blockchain technology, like a huge cake that can be exchanged. 2. Decentralized exchanges and smart contract platforms.

In order for users to transfer funds to their digital identities through smart contracts, we must create a decentralized trading protocol, also known as DEXs or “dapps”. And this DAPP is composed of the code of a smart contract platform run by a development team. “Cross-chain” technology allows DApps to interact without a third party, achieving faster interoperability. These are currently the two most common types of decentralized applications on most blockchains.

In the traditional blockchain world, “different types of DApps” usually have two main differences: “single” or polynomial: for example, in traditional banking systems, when it comes to financial activities, other encryption tools need to be used to complete them, such as banking business, payment processors, etc.

In the current Internet world, people are still used to using different blockchain solutions in different ways, such as communication and communication services on social media. This model is also called distributed networks.

Therefore, “decentralization” is actually a new business model.

But it is the same in the field of blockchain.

First, it is blockchain, which provides a new type of shared ledger technology (i.e., data transmission). Its greatest advantage is that it can ensure that all records are within the public classified ledger and have immutability and security. Second, decentralized technology allows anyone to participate in the blockchain and get rewards, including governance rights, voting rights, and contributions to the blockchain ecosystem. This mechanism allows anyone to freely access and manage various information in the entire blockchain economy.

The third situation is the applications built on the blockchain, such as DeFi applications like Uniswap, which can help users easily transfer encrypted assets.

Why has the price of DOT fallen so much?

Editor’s note: This article comes from the Wind and Fire Wheel Community (ID: FHBT18), author: Peipei, authorized reproduction by Odaily Star Daily.

Yesterday I saw a Weibo post asking why the price of DOT has fallen so much:

I found it interesting that someone asked this question because many people are looking for a reason to speculate on these coins recently.

But many times we don’t know exactly what caused this price surge.

For example, a reader wrote a sentence before, “If it’s not because it wasn’t sold, it may not be a good thing.” And now it seems to be trapped in a sense, so I think there should be an explanation here.

So, why is that? Just look at the trend of the market in the past two days, and you can understand it. Overall, it has been relatively healthy recently. Starting from October last year, there has been a saying in the market that when the defi heat is high, the dapps in the eth and polka ecosystems have seen a significant increase, and some projects are still on the way.

However, for some altcoins, there have indeed been some unfavorable signs this year, but in fact, some projects have made significant progress, such as the gas fees on Ethereum reaching a historic high recently, which is also a blow to some old projects. Of course, currently, the highest market value of most altcoins is still Bitcoin, and there is also EOS.

However, since early May, due to panic selling caused by the outbreak of DeFi, this has also caused a decline in prices. However, this afternoon, we observed the most eye-catching new project in the defi token-DOT, and its price continued to decline. So the question is, why did DOT fall so much? Why did it fall so many coins? The main reason is that its liquidity is insufficient, and it does not have support from other cryptocurrencies, which makes the market lack confidence in it.

First of all, DOT itself is a very niche and valuable product category. It is also a token similar to ETH, but it is not suitable for direct payment transactions. Secondly, due to its volatility and the problem of the number of users, when its application scenarios are relatively few, it may be affected by some negative emotions. In addition, it will also become a speculative asset.

On the other hand, as more and more people participate, this situation becomes more serious. So someone mentioned since September last year that if it can successfully achieve the landing and development of the DeFi field, it is definitely necessary to focus on other areas instead of focusing on it as before. On the other hand, it also shows that the hotspots in the current market are much larger than the previous market hotspots, especially the recent hot EOS, TRON, etc., and in this regard, there has not been particularly great progress yet. (Note: The above content is for reference only, for specific analysis, please refer to the article “Why can’t Wave Field completely surpass EOS” later.)