Examining The Network’s Growth, Challenges, And Future Prospects
Market intelligence firm Messari recently released Polkadot’s (DOT) third quarter (Q3) performance report, providing insights into blockchain network development and financial metrics during the period.
Polkadot sees strong developer engagement
One of the notable findings of the study Report is a developer event on Polkadot. According to Electric Capital, as of July 2024, the network has approximately 2,400 monthly active developers, including 760 full-time contributors. This places Polkadot in fourth place among leading blockchain networks, behind Ethereum, Base, and Polygon.
Additionally, Artemis tracks an average of 630 weekly active core developers and 760 ecosystem Developer The third quarter highlighted the vibrant development community.
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Polkadot also made significant progress in Q3 2024, launching several key initiatives aimed at strengthening its ecosystem. The decentralized futures initiative, backed by $20 million in funding and 5 million DOT tokens, has played a key role in driving innovation.
The program provides funding for a variety of projects focused on marketing, business development, governance and technology. Notable supported projects include AirLyft, DotPlay and BlockDeep Labs.
Another important development is the Cross Consensus Message Format (XCM), a standardized messaging protocol This facilitates communication between different consensus-driven systems, including rollup.
The daily average number of XCM transfers is approximately 1,000, a decrease of 34% month-on-month. In contrast, the non-asset transfer use case known as “XCM Other” increased by 5%, with an average of 200 transfers per day.
Overall, the total number of daily XCM messages averaged 1,300, a decrease of 29% month-on-month. Despite these fluctuations, a large portion of the activity on the Polkadot network still occurs through Polkadot Rollup.
DOT’s market value plummeted 27% in the third quarter
Judging from market performance, DOT has experienced significant fluctuations this year. From the third quarter of 2023 to the first quarter of 2024, DOT Market value Soared 150%, from $5 billion to $13 billion.
However, in subsequent quarters, including the second and third quarters of 2024, DOT fell back together with the broader market, and as of the third quarter of 2024, the market capitalization was US$6.3 billion, a 27% decline from the previous quarter. This drop also caused DOT’s market capitalization ranking to drop from 14th to 15th, although it remains the seventh largest base layer network.
Transaction fees on the Polkadot chain remain generally lower compared to competitors, which is attributed to the network’s structural design. In the third quarter of 2024, transaction fees were in line with historical averages, totaling $84,000, down 44% sequentially. Fees denominated in DOT also fell 21% to 17,000.
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On the other hand, the use of the Polkadot Treasury continues to be active, with 9.5 million DOT allocated to proposals, 7.4 million DOT used for bounties, and 2.5 million DOT burned.
A major development is the approval of Polkadot Referendum 457 in Q2 2024, which diversifies the treasury with USDT and USDC, allowing treasury proposals to Stablecoin. As of the end of the third quarter of 2024, the Treasury balance was $122 million.
The number of daily active addresses dropped to 6,200 (-26% month-on-month), the number of daily return addresses dropped to 5,300 (-23% month-on-month), and the number of daily new addresses dropped to 900 (-38% month-on-month).
In terms of immediate price action, DOT price has been trading at the $8 level for the past four days and has been consolidating above this level since then. The coin has been one of the best performers since the election of Donald Trump on November 5, with a massive 96% gain on the monthly time frame.
Featured images from DALL-E, charts from TradingView.com
