Cryptocurrency News

Polkadot price rises 37% after Coinbase Pro DOT listing, first Parachain auction

Polkadot (DOT) saw a massive reversal in previous daily sessions as traders assessed the cryptocurrency’s entry into United States-based digital asset trading platform, Coinbase Pro, and Parachain slotted above Kusma, the trial version of the Polkadot network. Upcoming auction, this Tuesday.

The DOT/USD exchange rate rose to $26.44 during the Monday session, after a nearly 37% up move that began in the previous daily session. Nevertheless, entering the Asia-Pacific and European trading hours on Tuesday, the pair corrected more than 4.5%, hitting an intraday low of $ 24.25.

Polkadot pulled back after testing technical resistance near $26.668. Source: TradingView

The initial bullish momentum in the Polkadot market came in the wake of Bitcoin (B T c) Price rally on Sunday. Billionaire investor Elon Musk commented on Sunday that he would restore accepting bitcoin payments for Tesla’s electric vehicles if the cryptocurrency’s fresh supply comes from electricity supplied by renewables.

The BTC/USD exchange rate rose from a low of $34,780 to above $40,000 following Musk’s remarks. Meanwhile, top altcoins, which heavily favor bitcoin’s trend, followed suit, with DOT prices moving higher.

Nevertheless, the scale at which the Polkadot token grew dwarfed the retracement rallies of most of its top crypto rivals. The increased move by DOT coincides with the announcement of Coinbase Pro to add DOT-enabled trading instruments to its platform.

Kusma Parachain Auction

More bullish signals for traders came from Parallel Finance. The startup raised $2 million to scale up its lending and stake facilities on the Polkadot and Kusama blockchains.

In retrospect, Kusama serves as a sandbox for projects with aspirations to launch a parachain on Polkadot. Therefore, the tested blockchains come with real economic benefits and results, enabling other blockchains and apps to be launched with forkless upgrades, governance structures, and scalability.

That said, Project Harness Kusma’s Inter-Parachain Network To communicate with other apps that have separate parachains.

But to win Parachain slots projects like Parallel Finance must participate in Parachain auctions. In doing so, they will be required to deposit the bid amount (in DOT or Kusama’s native token KSM) along with the slot period (6 to 24 months). It expects to effectively lock DOT and KSM tokens for the duration of the slot, thereby reducing the circulating supply of tokens.

Meanwhile, observers believe that the demand for DoT and KSM will continue to grow based on their competitive auction process.

According to Alex Simon, founder of Polkadot-based decentralized social network, SubSocial, projects that win the Parachain auction will do a lot to provide value to their community and supporters.

“On Polkadot Parachain, slots for projects to build on chain are limited to 100, making the auction process particularly competitive,” he explained. “A non-innovative project may not be able to win such an auction, and those who do would not want to waste the opportunity to go down in history.

related: KSM Defying Downtrend Kraken Launches Kusama Parachain Auction Platform

The first Parachain auction went live on Tuesday around 1100 GMT on the Kusama Network. KSM fell 2.77% in the opening European trading session.

Polkadot, on the other hand, is yet to announce the auction of its Parachain slots. Mira Cristanto, a researcher at crypto data analytics firm Messari, pointed out that since May 65% ​​of DOT’s active supply is already at stake. Only 30% of DOT is in circulation now – and the upcoming Parachain auction will take those tokens out of supply.

“After Parachain is launched, 40% of the DOT can be added to Parachains, thus reducing the effective circulating supply to just 15%,” he said.