Tic-Toc, Tic-Toc, We're Going To Polkadot

Summary Polkadot’s blockchain is complex, yet thoughtfully designed by Ethereum’s former Chief Tech Officer. Polkadot’s ecosystem is finally becoming appreciated by both enterprises and users. Mythical Games’ recent FIFA partnership could see an explosion of players. There’s a chance that TikTok U.S. moves to Polkadot due to an impending congressional ban. There are multiple catalysts that give Polkadot a favorable risk-reward profile. Thesis This writeup updates my previous deep-dive of Polkadot ( DOT-USD ). I feel a sense of urgency to review all Altcoins, as I believe we’re on the cusp of Altcoin season (see my article entitled Bitcoin's Passing The Baton To Altcoins ). I believe Polkadot, and NEAR Protocol ( NEAR-USD ) are the best designed blockchain projects, though their marketing departments leave much to be desired. I believe DOT’s momentum will accelerate into 2025 given a host of gaming partnerships and potential TikTok win. This article also updates my rating scorecard for Polkadot. Introduction The last time I wrote about DOT, I said that we were in Crypto Spring and that the Bull Market began in Fall 2023. I now believe we’re entering Crypto Summer , the most speculative and last-stage of the Bull Market. As Bitcoin prices near $100K, investors become overly confident and shift their interest to faster Altcoin-horses. (At the present time, the market seems overbought and ripe for a correction, which could give investors an entry-point for DOT.) The main factors pointing to an Altcoin-season are: Falling Bitcoin Dominance (from 60% to 57% over the last two weeks) High-volume breakouts of several Altcoins including DOT Long-duration small-caps and MEME stocks getting traction Rising Social Metrics (i.e., social engagement measured by Ben Cowen ) YahooFinance Project Overview Polkadot is a complex, third-generation L0 project. Doctor Gavin Wood designed Polkadot to enable all blockchains to communicate with each other, including EVM (Ethereum) chains. I like to describe Polkadot to my salt & peppered-haired friends as being a decentralized version of AOL’s America Online “walled garden”. For a detailed description of Polkadot, please refer to this document. JAM Upgrade On May’24, Polkadot’s community near-unanimously agreed to execute the next stage of its evolution: JAM (Join-Accumulate Machine). The new Polkadot is so complicated, I’m going to attempt to explain it in the way Gavin does. Think again of AOL’s garden, with each flower petal representing a parachain connected to the central relay chain (manages the consensus mechanism). Now picture JAM as this “intelligent liquid fertilizer” (i.e., blockspace & processing power) that’s able to dynamically nourish flowers as needed. The above illustrates how the JAM upgrade enhances Polkadot's scalability, efficiency, and adaptability while maintaining interconnected parachains. Polkadot Ratings Scorecard Polkadot is amongst the highest-rated project within my scorecard, which is summarized below: Author's creation Polkadot’s Potentiality In my last article, I lovingly said, “Annualized revenues aren’t much higher than a partner at a D.C. law firm.” But I also said Polkadot had lots of potential because they had the three key ingredients needed to boost the probability of success: Funding, Social Engagement and Developers. Author's creation I see several catalysts that could help Polkadot expand its ecosystem. I’ve excluded JAM, which is going to be a 2025-26 catalyst. So let’s discuss them one by one: EVM / Moonbeam This parachain is an EVM compatible smart-contract platform for cross-chain Dapps that unites Ethereum and Polkadot’s functionality. While there are several chains doing the same thing, what’s unique is that Polkadot is also releasing a bridge to Ethereum’s L2 chains. Total Value Locked (TVL) approximates $40MM, according to Messari and has failed to gain momentum since 3/2024. However, recently, I noticed positive net cross-chain transfers using WormholeScan . WormholeScan Messari Mythic / NFL Rivals The most exciting parachain is Mythical Games, (aka Mythos) which moved from Ethereum to Polkadot in 2023. Mythical is the project behind the first blockchain game (NFL Rivals) licensed by NFL Football. Already, Mythos has climbed the NFT ranks (from 10 to 5) in a little over one year. Crypto Slam Mythic / FIFA Rivals As exciting as NFL football is, the largest prize is soccer (“Football” in pie chart). As I’m writing this, Mythic just partnered with FIFA for a free-to-play soccer game to be released in summer 2025. I expect FIFA Rivals’ players to be 10x larger than NFL Rivals’ (~ 6 million ) given that there are 10x more soccer fans than football fans. WorldAtlas.com Pudgy Penguins / Pudgy Party Mythical is also partnering with the team behind Pudgy Penguins. Pudgy is one of the most expensive and popular NFT collections. Mythic will be introducing Pudgy Party (a game) in 2025. Pudgy Penguins has been the only blockchain project that went from Web3 to Web2 (via their partnership to sell stuffies at Walmart). Pudgy Penguins is an Ethereum-based project – the move to Mythic for its new game may lead to moving the whole project to Polkadot. NFT PriceFloor Real World Assets / Centrifuge While Ethereum has control of the Real World Asset (RWA) market, Polkadot’s Centrifuge parachain has been steadily increasing Total Value Locked. Note, the recent dip is likely due to expiration of tokenized bridge-loans. Centrifuge’s website has TVL of $121MM (far greater than what’s reported from data aggregators). Defi Llama TikTok may move to Polkadot The Biden administration has given TikTok until early 2025 until it bans the app. There’s a proposal from former LA Dodgers owner, Frank McCourt (of Project Liberty) which includes moving TikTok U.S. to a decentralized blockchain (DSNP) on Polkadot. While this could be a slow process, it’s clear that it would be nothing less than a game-changer if TikTok moves to Polkadot. As of early 2024, TikTok had 150 Monthly Active Users in the U.S. Search Logistics A word of caution on data providers Polkadot is a very difficult blockchain to get your head-around. I utilize several resources for collecting Polkadot’s data. However, none of these accurately measure Polkadot’s ecosystem as they have issues aggregating the underlying parachains. For example, while the number of Polkadot’s Twitter followers and Core Developers are correct, daily active users (DAU) and TVL are undercounted. Artemis Conclusion Cryptos are informationally inefficient assets. Their movements reflect sentiment and Bitcoin’s price action. However, given Polkadot’s recent momentum and the potential for a TikTok win, I think DOT offers a favorable risk-reward profile . Given DOT’s typically weak relative strength, I recommend using a dollar-cost average purchasing strategy.