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Digital Nugget: Interoperability goes MOON

Interoperability goes MOON – Sygnum Platform Winners Index welcomes Polkadot

Digital Nugget

Interoperability goes MOON – Sygnum Platform Winners Index welcomes Polkadot

The Sygnum Platform Winners Index selects tokens that show the highest acceptance based on adoption by the financial markets, users, and developers. The token of the Polkadot protocol has increased tenfold in value in the 6 months since its listing, and after the required minimum 3 months of trading history, the token entered the Sygnum Platform Winners Index and the ETP linked to the index.

The price of the Polkadot token tripled from its August 2020 launch to the end of last year, and it has tripled again since then, making it one of the largest market capitalisation tokens in a short time.

What justifies the prominence of this young project?

In the first place, the technology. For a protocol to shoot to prominence, the technology needs to be a genuine and significant innovation and it needs to solve a major painpoint in the evolving blockchain space. Polkadot brings a lot to the table on both counts.

The innovation:

The Polkadot network is a multichain framework that allows separate blockchains to operate seamlessly together: transactions can be processed in parallel and data can be exchanged between chains.

Why this is important:

Scalability and interoperability are two serious pain points in the blockchain industry.

  • Legacy protocols are challenged by the volume and speed of transactions they can process. Many are working on upgrades that would improve the throughput, speed, and lower the costs of transacting. Polkadot offers a solution.
  • Legacy blockchains are independent silos and transferring data and value between them is hard. This is a limit to both mass adoption and efficiency – it creates data redundancy as well as a market for new intermediaries. Interoperability of chains opens the way to mass adoption. Polkadot is an interoperability solution.

The token’s meteoric rise is also supported by the well designed token supply/demand dynamic (“tokenomics”), the credibility of the team, and the quickly manifesting growth of an ecosystem.

Polkadot is not the only attempt at interoperability but it offers broader functionality than the alternatives, fast ecosystem growth, and certain superior features (shared security across chains, more flexibility for developers).

As the success of the technology is the cornerstone of the project, the biggest risk also lies in possible disappointments or delays on that front – such as delays to the full launch of the protocol or building the Ethereum bridge.”

Disclaimer

This document is purely for educational purposes and has been issued by Sygnum Group. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication. It does not constitute an offer or a recommendation to subscribe, purchase, sell or hold any security or financial instrument. It contains the opinions of Sygnum Group, as at the date of issue. These opinions and the information contained herein do not take into account an individual‘s specific circumstances, objectives, or needs. No representation is made that any investment or strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes personalized investment advice to any investor. Therefore, you must verify the above and all other information provided in the document or otherwise review it with your external advisors. Some investment products and services, including custody, may be subject to legal restrictions or may not be available worldwide on an unrestricted basis. The information and analysis contained herein are based on sources considered as reliable. Sygnum Group uses its best efforts to ensure the timeliness, accuracy, and comprehensiveness of the information contained in this document. Nevertheless, all information indicated herein may change without notice.

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