Editor's Note: This article comes fromTalk about Xia Kanshi (ID: huaxiakiss), Author: Hua Xia, published by Odaily with authorization.
Editor's Note: This article comes from
Talk about Xia Kanshi (ID: huaxiakiss
Talk about Xia Kanshi (ID: huaxiakiss
), Author: Hua Xia, published by Odaily with authorization.
Fortunately, this investment has brought good returns for me and the friends who participated with me. It is precisely because of such book income that I began to carefully consider whether I should cash out and leave? Or continue to hold?
To answer this question, it becomes, where is the growth potential of the DOT project? What is the investment logic?
Different from the situation when investing in the primary market, DOT now has more fundamentals, ecology, data, and most importantly, market pricing in the secondary market for reference.
This is not a popular science article, but a self-question and self-answer as an investor and stakeholder from the perspective of his own investment benefits. Therefore, if some project-specific terms, abbreviations, etc. are mentioned in the article, it is difficult for me to explain them specifically. If you are interested, you can go to the WeChat official account: PolkaWorld, and you can basically get the answers you want.
secondary title
The necessity of the existence of non-Ethereum public chain
Polkadot has been compared with Ethereum since its white paper was released in 2017. Especially at the moment, Polkadot is considered to be the most powerful competitor of Ethereum. This is no secret.
I have to admit that Ethereum is an excellent public chain. After 7 years of development, the ecology has been greatly enriched. On Ethereum, people see the great possibility of blockchain.
However, the development of Ethereum is restricted by high handling fees and limited TPS.
Ethereum 2.0 aims to solve these two problems. Whether these two problems can be effectively solved will take several years to verify.
In the blockchain world, the dominance of Ethereum in the field of public chains makes it easy for people to have an illusion that as long as there are no major problems with Ethereum, the competition in the public chain seems to be settled.
However, let’s look at the blockchain and Ethereum objectively: Ethereum has been around for 7 years, and the concept of blockchain has been proposed for almost this length of time. The total market value of ETH is currently 67 billion US dollars, which is approximately equal to the market value of Weilai Automobile a few days ago, and Weilai Automobile is only one of the many players in the field of new energy vehicles. Excluding the market value of BTC, ETH accounts for 24.5% of the entire non-BTC market value.
As for the blockchain, I think it should reach a market size comparable to or even larger than that of future new energy vehicles. The proposal of the Internet of Value is not a slogan, but an infrastructure that is necessary for the development of the real era.
Back to the above two major problems faced by Ethereum: high fees and limited performance.
The necessity of continuous development of the market and the current window period of Ethereum's problems have given the necessity of the existence and development of non-Ethereum public chains. What the market needs, and if you can give it accordingly, then the ecology and market consensus of the project will be greatly improved in a short period of time.
But it should be noted that the existing huge advantages of Ethereum determine that later competitors cannot follow the route of Ethereum, otherwise there will be nowhere to go.
I spent a long time explaining "the necessity of non-Ethereum public chain". Because this is very important and is the premise of everything.
secondary title
Next, let me talk about some specific views on Polkadot:
01 Founder Gavin Wood has a strong developer appeal
The current fundamentals of the blockchain fall to the most practical point, and it is still the competition of technology. The richness of developers in the ecology determines the vitality of the ecology in the future and the ability of self-growth and evolution. And a founder with strong technical background and strong personality will become the decisive factor in attracting developers to try new things in the early stage of the project. This is not the effect that can be obtained by subsidizing money. And Gavin Wood's previous blockchain experience and his own coding ability are so attractive.
Up to now, there are more than 300 officially available Polkadot ecological projects, covering infrastructure, stable currency, games, Defi, tools, DAPP and so on.
02 Polkadot's ultimate sharding logic is different from the different routes for sharding on the Ethereum chain.
Through the cross-chain protocol, a multi-chain sharding network is built. Developers build a proprietary chain based on Polkadot. The proprietary chain can be customized according to its own business needs, and it is autonomous and has strong flexibility. The multi-chain network built by Polkadot can process various transactions on multiple chains in parallel. This essentially brings great theoretical scalability and customization capabilities to Polkadot.
From the perspective of performance improvement, the two public chains have gone to the same direction of sharding, but different from the sharding of Ethereum, Polkadot has achieved more extreme and thorough sharding, which brings new expectations to Polkadot Space. For the time being, it is impossible to talk about which is better, and such uncertainty is the elastic range of valuation.
03 Economic model of high correlation offset loss.
In Polkadot’s token economic model, from the perspective of supply and demand, in addition to the traditional use for GAS consumption, Staking pledge, and governance, there are some interesting designs.
The most important of these are the auction of parachain slots and the use of parathreads.
To access the Polkadot network, developers need to bid for parachain slots, and the lease periods for parachain slots are 6 months, 12 months, 18 months, and 24 months. The acquisition of the project party is not without threshold. It needs to be in the form of public bidding. The highest bidder will get the right to use the slot within the specified period. It is worth noting that the bidding is done in the form of DOT; and the DOT locked by the project party after the successful bidding is not directly consumed in the form of purchase, but returned after expiration.
There will be a question here. In order to bid for the slot, does the project party need to buy all the DOT it needs? Obviously, this is unreasonable in terms of the utilization rate of funds. Therefore, the form of emergence is IPO (the first parallel chain issuance). IPO is a unique financing method for Polkadot ecological projects. The project party can initiate an IPO to raise DOT from everyone to bid for parachain slots. If the auction is successful, these DOTs will of course also need to be locked for a certain period of time. The project party will provide some incentives for IPO participants, such as airdropping project party tokens and so on.
The project party attracts a large number of currency holders to provide the required DOT for their own auction slots by airdropping their own project tokens. This will become the most important form of Polkadot ecological project distribution project tokens. In other words, this function is the same as the original Ethereum ecological ICO.
IC0 is in the form of direct purchase by users, and the support project Fangbo card slot auction to obtain project tokens will not lose their own DOT principal.
It can be foreseen that this kind of wool-sweeping method to obtain project tokens will be very attractive to investors, and the auction of parachain slots may push the final transaction price of the auction due to the psychological effect of wool-sweeping. to a high position. And this will bring huge and continuous demand for the secondary market price of DOT. As long as the secondary market price of a Polkadot ecological project brings a huge return on wool, the market will be detonated.
Parallel thread (Parathread) is a way for projects that want to become parachains to temporarily participate in Polkadot shared security without renting a dedicated parachain slot. This is achieved by economically competing among multiple parathreads to share the scarce resource of parachain slots. Chains that cannot get a full parachain slot, or do not think it is economically sensible to do so, can still participate in Polkadot's shared security, with the network charging a per-block fee.
Parallel threads require a minimum amount of collateral (50-100DOT). On the basis of shared security and connectivity, parathreads allow the chain to submit a block to the relay chain when a batch of transactions is processed.
04 Chip distribution is basically completed. This is an important point, but often overlooked.
For many projects, they like to adopt the rules of lock-up and linear release to allocate chips for private placements, public placements, teams, etc. Although this effectively controlled the selling pressure in the market in the short term, it actually shifted the selling pressure to the medium and long term. As for the market, due to fear of continuous selling pressure, it has been unable to give a healthy price for the project.
Polkadot does this very well. Although the valuation was already high at the time of private placement financing, it did not adopt the form of mandatory lock-up. At present, the total amount is 1 billion, and more than 900 million have been in circulation. Only a small part of the tokens during the public offering and financing have not been released (will be unlocked on January 19). This lays the foundation for the healthy growth of DOT prices in the future with the development of the project.
05 Is DOT undervalued?
When the EOS mainnet was launched, it reached 160 billion yuan, which is equivalent to a market value of about 24 billion US dollars. If DOT reaches the valuation level of EOS at that time, I think the probability is extremely high, and the corresponding DOT price is about 24 US dollars. (At present, the ecological development of Polkadot has surpassed the EOS ecology at that time, and the richness of ecological developers is higher)
