This week, quite a lot of contenders are set to take part in Polkadot’s first parachain auctions and this course of tends to put purchase stress on DOT, whereas additionally giving aspiring blockchain tasks an opportunity to indicate why they provide probably the most aggressive options to the completely different calls for that exist within the crypto sector.

The continued Polkadot parachain auctions comply with the success of comparable auctions on its sister community Kusama, the place tasks like Moonriver (MOVR) and Karura have every efficiently secured a parachain slot for the following yr.

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High 5 crowdloans on Kusama by reward score. Supply: Parachains

The Kusama parachain auctions started throughout a downturn within the wider crypto market and performed a task in serving to KSM get better from a low of $148.85 on July 19 to its present worth close to $457 because the tokens pledged to auctions had been pulled from circulation.

Right here’s a have a look at among the parachain auctions at present underway on the Polkadot community and just like the Kusama auctions, DOT may obtain a lift as an rising variety of tokens are faraway from the circulating provide.

High 4 parachain auctions at present underway on Polkadot. Supply: Parachains

Acala

Acala (ACA) is a layer-one good contract platform billed because the decentralized finance (DeF) and liquidity hub of Polkadot. The protocol is Ethereum (ETH)-compatible and has built-in liquidity and ready-made monetary purposes, together with a trustless trade, a decentralized stablecoin (aUSD) and DOT Liquid Staking (LDOT).

Acala is the sister community of the Karura (KAR) DeFi protocol, which operates on the Kusama community and affords lots of the similar functionalities.

On condition that DeFi has emerged as one of many foundational sectors of the cryptocurrency ecosystem, having a big, established DeFi protocol that may appeal to liquidity and supply token holders some yield is a must have for each community.

Moonbeam

Moonbeam (GLMR) is a completely Ethereum suitable good contract platform designed to simplify the method for multi-chain tasks to launch on the Polkadot community.

Moonbeam’s sister community on Kusama is Moonriver, which provided the very best reward score of all parachains launched on the Kusama community.

Simplifying the method of a cross-chain migration to Polkadot is a vital situation to deal with within the present market as a result of excessive charges on Ethereum remains to be one of many foremost reaons why traders and builders have shifted to lower-cost alternate options like Polygon, Fantom and Avalanche.

If Moonbeam may help simplify that course of for tasks, it has the potential to assist increase the general energy of and exercise on Polkadot.

Astar

Astar (ASTR) is a protocol targeted on the creation of a scalable and interoperable infrastructure for Web3.0 by the creation of a multi-virtual machine supporting platform that connects suitable layer-one protocols with the Polkadot community.

Astar can be able to appearing as a scalable good contract platform that helps the Polkadot relay chain which isn’t capable of assist good contracts.

Parallel Finance

Parallel Finance (PARA) is a DeFi lending protocol and automatic cash market (AMM) that helps each Polkadot and Kusama-based property and in addition offers token holders the power to place their property to work by incomes curiosity.

The protocol goals to supply larger liquidity, yield and capital effectivity for the Polkadot ecosystem and customers will finally have the ability to lend, stake and borrow property from any of the supported networks.

Associated: DeFi protocol Acala raises $400M in crowdloans during first Polkadot parachain auction

DOT and KSM flip bullish forward of auctions

The continued parachain auctions for Polkadot are prone to put optimistic stress on the worth of DOT as a result of customers are shopping for tokens to contribute to crowdloans and this successfully removes the tokens from circulation for 2 years.

As seen within the chart beneath, the introduction of crowdloans on Kusama in June 2021 resulted in a spike in token worth whereas the worth motion for DOT was extra muted.

KSM/USDT vs. DOT/USDT 4-hour chart. Supply: TradingView

Now, the other is going on as the worth of DOT is seen outperforming the worth of KSM, a course of that started mid-September simply as pleasure for the Polkadot parachain auctions began to extend.

With eleven units of parachain auctions set to run weekly between November 11, 2021 and March 10, 2022, there’s a robust risk that the worth of DOT will proceed to extend so long as the demand for parachain entry continues.

The views and opinions expressed listed here are solely these of the writer and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer entails threat, you must conduct your individual analysis when making a choice.