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Wednesday, 06 Oct 2021
Crypto Notes
A weekly newsletter decoding crypto, blockchain and the entire ecosystem.
By Rohas Nagpal

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All about Polkadot (DOT)

Over the last few weeks, we discussed Dogecoin (DOGE), Cardano (ADA), Binance Coin (BNB), Solana (SOL), Bitcoin (BTC), and Ether (ETH), and Filecoin (FIL). This week we take on Polkadot (DOT).

Let's start with some interesting crypto news.

Sales of non-fungible tokens (NFTs) in the third quarter of 2021 are estimated to be $10.7 billion. This is 8 times that of the second quarter.

The Kazakhstan government has restricted crypto mining due to a power shortage in the country. Due to the Chinese crypto crackdown, miners have moved to Kazakhstan due to low electricity prices. This has resulted in a 7% increase in electricity demand in the country and has resulted in a power shortage.

Walk-in crypto-currency exchanges are starting off in some countries. These offer in-person advice, a physical presence, and even the facility to buy crypto for cash.

1. What is Polkadot (DOT)?

Name: Polkadot

Symbol: DOT


Polkadot is not a conventional blockchain. It is actually an ecosystem of interconnected blockchains called parallelized chains (parachains). Parachains are application-specific and they plug into a single base platform called Relay Chain.

The Relay Chain does 2 main things:

It secures the parachains.

It contains Polkadot's consensus and voting logic.

Polkadot was conceptualized by Ethereum co-founder Dr. Gavin Wood. He is also the inventor of the Solidity smart contract programming language.

Polkadot has an interesting history. It raised funds through an ICO in 2017. A hacker "froze" 66% of these funds within a few days of the raise!

What I like best about Polkadot is that its network has a common set of validators for securing multiple blockchains. And that transactions are spread across multiple parallel blockchains.

DOT is the native token of the Polkadot network. DOT helps in operating and governing the network, and in creating parachains.

Consensus mechanism:

GRANDPA (GHOST-based Recursive ANcestor Deriving Prefix Agreement) and BABE (Blind Assignment for Blockchain Extension)

2. Metrics

As of 5 October, its core metrics are:

Price metrics

Current Price: $ 32
All-time high (May 15, 2021) $ 49.69
All-time low (Aug 20, 2020) $ 2.69

Supply metrics:

Circulating supply: 987.6 million DOT
Total supply: 1.1 billion DOT
Maximum supply: Unlimited


Circulating Supply is the number of coins / tokens in public hands.

Total Supply is the number of coins / tokens created minus the number burned.

Maximum Supply is the maximum amount of this crypto that can ever exist

Figures have been rounded off for convenience

Marketcap & Volume metrics:

Market Cap: $ 31.7 billion
Fully Diluted Market Cap: $ 35.4 billion
Volume (24h): $ 1.29 billion
Volume / market cap ratio: 0.04
Velocity: 1.3


Market cap = Current Price x Circulating Supply

Fully Diluted Market Cap is the market cap if the maximum supply was in circulation

Volume (24h) is the fiat value of this crypto traded over the last 24 hours

Dominance measures a crypto's total market capitalization relative to the total market cap of all cryptos

Volume / market cap ratio = 24h Volume / Marketcap

Velocity = 24h Volume / Circulating Supply

Figures have been rounded off for convenience

Risk metrics:

  Volatility Sharpe ratio
Last 30 days 1.5 0.17
Last 90 days 1.3 2.93
Last 1 year 1.5 2.04
Last 3 years 1.8 1.4


Volatility measures the annualized standard deviation of daily returns

Sharpe Ratio measures the excess return for a given level of risk

3. Wallets

The popular wallets include Fearless Wallet, Klever, Polkawallet, and Stylo.

Note: The data/graphs are from CoinMarketCap, Messari, and Future Money Wallet. Figures as of 5 October 2021.

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Rohas Nagpal is an author, an amateur boxer, a blockchain architect, a Tintinologist and a retired hacker.

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