Will Polkadot (DOT) price reverse course now that cross-chain messaging is live?

Growth inside the Polkadot (DOT) ecosystem has been slowly unfolding over the previous 12 months and a half, and the work put in by builders is lastly beginning to bear fruit as parachain auctions end and the primary chains launch on the mainnet. 

The following part of interoperability inside the ecosystem is about to kick off now that cross-chain performance is about to go dwell. This subsequent step will permit Polkadot-based parachains to speak with one another and switch property between chains.

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After passing group vote, v0.9.19 has been enacted on Polkadot. This improve included a batch name upgrading Polkadot’s runtime to allow parachain-to-parachain messaging over XCM and upgrading #Statemint to incorporate minting property (like NFTs) and teleports. pic.twitter.com/uqIB5di2Q1

— Polkadot (@Polkadot) May 4, 2022

Right here’s a take a look at what the launch of the XCM messaging system means for the value of DOT, the choices that are actually out there to DOT holders and the way this growth will increase its performance inside the Polkadot ecosystem.

Polkadot is unshackled

Up so far, DOT had restricted makes use of and was principally remoted by itself community with out a lot performance. Its primary capabilities included staking, governance and contribution in parachain crowdloans, which helped cut back the circulating provide however did little else to actually spark demand.

The introduction of cross-chain communication enabled DOT transfers to numerous parachain networks and the variety of use instances for the DOT token on parachains like Moonbeam and Astar Community.

1/ $DOT is now dwell & usable in DeFi on Moonbeam!

Following this morning’s #XCM launch to @Polkadot, Moonbeam has added xcDOT, an XC-20 illustration of DOT on its parachain.https://t.co/gCXIqwlXWb

— Moonbeam Community (@MoonbeamNetwork) May 4, 2022

Knowledge from Cointelegraph Markets Professional and TradingView reveals that the value of DOT has been exhausting hit by the six-month downtrend within the crypto market as its worth has declined 73% from its all-time excessive at $55 on Nov. 4. 

With the token now buying and selling at a notable assist/resistance stage, it stays to be seen if the power to switch DOT throughout varied parachains will assist result in a rise in demand for DOT.

Associated: Polkadot launches cross-chain messaging system to unravel blockchain’s bridge downside

New use instances

One notable use for DOT that has been rising in reputation in latest months is liquid staking and minting stablecoins through the use of crypto property as collateral.

DOT can now be transferred to the DeFi-focused Acala parachain and deposited in its liquid staking contract in change for LDOT, which may then be used as collateral to mint aUSD, the native decentralized stablecoin of Polkadot and Kusama.

This additionally means it’s time to unbond $DOT from @Polkadot for LDOT staking. Liquid DOT staking, $LDOT, is about to go dwell on @AcalaNetwork

– Larger yield
– Maintain incomes DOT staking rewards however get $LDOT to make use of in DeFi or to mint $aUSD
– Prompt unbonding
– Totally decentralized

— Dan Reecer ️⚪️ (@danreecer_) May 3, 2022

DOT can be utilized in varied DeFi purposes together with yield farming, lending and borrowing. Because the introduction of cross-chain communication spreads all through the Polkadot ecosystem, further makes use of for DOT are prone to emerge, particularly as parachains roll out elevated performance.

The views and opinions expressed listed below are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, you must conduct your personal analysis when making a choice.