Will Polkadot be the next trillion-dollar asset?

Photo by Michael Dziedzic on Unsplash

Someone recently tweeted out a timeline for different companies to achieve trillion-dollar assets. These assets include Google, Apple, Microsoft, Amazon and Bitcoin. Out of these assets, Bitcoin took only 12 years to achieve the goal. And the most amazing thing is that Bitcoin is a completely automated system that naturally creates a trillion-dollar asset size. So the very natural question that follows is which crypto-digital asset will be the next to reach the trillion-dollar asset size first?

If we look at the current market cap of crypto digital assets, Polkadot and Cardano are already in the top 5. I think both of these public chain projects are very promising. But Polka has a better chance of being the first to reach trillion-dollar assets.

Polkadot has broader community support and its ecosystem is way ahead of the curve so far. Its main growth regions are currently in Europe and Asia, which allows it to differentiate itself from public chain projects that are primarily based in the U.S. region and facilitate its rapid growth. Polkadot has also been very positive in terms of market influence. Judging from the recent trend of its coin value, it is clearly gaining recognition from speculators as well.

So all in all, Polkadot is likely to be the next crypto-digital asset to reach trillion-dollar asset size first. However, the path for it to achieve this goal will only be more winding than that of bitcoin, and it will likely take more than 12 years.

Facing a lot of competitors

Whether a fiat-based stablecoin can be introduced early

Therefore, for any blockchain ecosystem, the early introduction of a stable and scalable stablecoin is the most essential element to determine the development of the ecosystem. In this regard, the upcoming Diem ecosystem has a very strong first-mover advantage. This is because the Diem stablecoin is the basic product that is available at the start of this ecology. Stablecoin-based payments are the most preferred, easiest to implement, and the most widespread application. Once stablecoin-based payments are up and running, it helps to quickly achieve network effects. The foundation of the ecosystem will therefore be strengthened very quickly.

Whether a killer application can emerge soon

As mentioned before, the payment application is the easiest and most effective application to build up the network effect, and it is a mechanism that works for a long time. I don’t think the current DeFi boom will last, and the reason why DeFi is so popular is that the participants are able to profit from it. And the main users of DeFi are speculators. Given the current bull market in cryptocurrencies, investors are able to take advantage of DeFi for profit opportunities. But I think the bull market will pass quickly, so DeFi-based applications are bound to diminish quickly as well. This will not help the blockchain-based ecosystem. So for the Polkadot-based ecosystem, it is important to start the stablecoin-based payment business as early as possible to help it achieve long-term ecosystem growth.

Will it be quickly accepted by institutions?

Bitcoin is now achieving a trillion-dollar market cap because institutions have been gradually buying since the 2nd quarter of 2020, and reached peaks in early 2021. Institutional client buying is what pushed Bitcoin to the trillion-dollar size, and this factor holds true for Polkadot as well. But as of now, Polkadot is not trending very well in this area. If this issue is not addressed, it will certainly not achieve trillion-dollar size.

The compliance status of DOT to be clarified

I think Polkadot’s current market cap of nearly $40 billion is not a true reflection of its value, but rather the result of market speculation. This is the same as the current state of the crypto market. At this stage, there is no application that has started running on the Polka ecosystem. Even if there are applications running on its ecology, the popularity of these applications by the market is yet to be tested. So the current market cap of nearly $40 billion for Polkadot is highly optimistic, or it could be said to be the result of speculative hype.

Overall, I think Polka is likely to be the next crypto digital asset to be the first to achieve a trillion-dollar asset size, but it only exists as a possibility now, and there are still many risks to its future.

But the mechanics of Polka’s product and the growth of its current community do give it a very strong competitive advantage. At least for now, it seems likely to be the next crypto-digital asset to be the first to achieve a trillion-dollar scale.

Article from Gu Yanxi, Founder of Liyan Consulting

Translated by Yang(Mengyan Finance)

To translate some latest policy and issues on blockchain and fintech happened in China