Polkadot (CRYPTO:DOT) is a relatively new cryptocurrency that is gaining popularity at a rapid pace. While this token remains a long way off from a top-five spot in the crypto rankings by market capitalization, there are plenty of bulls who believe such a move is possible.
It’s possible, maybe. But given how well established certain crypto players are, perhaps such a move is implausible.
Let’s dive into what investors are watching with Polkadot as we head into April.
Parachains: A term to understand when assessing Polkadot
Polkadot is an open-sourced sharing protocol that allows other blockchains to be built on top of it. Essentially, many investors refer to Polkadot as a “layer-0” network, as it allows other layer-1 networks to exist.
These layer-1 networks are built upon parallel chains called parachains. These are native blockchains using the consensus mechanism of Polkadot’s network. Additionally, these parachains benefit from pooled security, allowing for bridges to connect projects to popular blockchains such as Ethereum and Bitcoin.
Thus, interoperability is the problem Polkadot is out there to solve. This is made possible via the network’s structure. Over time, as more projects look to speak to one another, Polkadot could continue to increase in importance. Right now, that’s what many investors are betting on with this network.
Quite a few projects joining the Polkadot network
This year happens to be a key year for development within the Polkadot ecosystem. There are several key projects ready to be launched on Polkadot. Among these are the likes of Kusama, Kilt, Protocol, Moonriver, and RMRK.
Kusama is the cousin and experimental version of Polkadot, with lower stability. This network indulges more daring projects, boasting a valuation of $2.5 billion as of earlier this year.
As more projects get built on Polkadot, crypto investors looking for long-term winners have more catalysts to rely on to invest in this token.
Bottom line
April could very well be a pivotal month for Polkadot. There are many exciting projects set to be released, with more likely on the horizon later this year.
I think Polkadot is an exciting project to keep on the watch list right now. Accordingly, this is a token I’ll be diving into throughout the year.
