February 4, 2023

  • Polkadot’s TVL has grown in recent months
  • DOT’s weighted sentiment increased towards the end of November, but fell quickly

Polkadot has maintained a strong presence in the list of top crypto projects by market capitalization. Many savvy analysts observing the crypto space have high hopes for this crypto project, mainly because of its different approach.

Read Polka Dots [DOT] Price Forecast 2023-24

But there is another measure of growth that can help investors understand what to expect in terms of growth in 2023, and where that growth is likely to come from.

Polkadot parachains are optimistic

Total Value Locked (TVL) is one of the best metrics for measuring network growth. Recent data revealed a list of Polkadot parachains that have achieved significant TVL growth to date.

According to the list, the Acala network had the highest TVL with $204 million. Parallel was a close second with a TVL of $196.6 million. Moonbeam, Bifrost and Astar also made the list.

The TVL growth achieved by these Polkadot parachain projects may not seem impressive at first glance. But what makes it interesting is that this is a growth that has been realized in the last 12 months. Why is this important? They achieved such growth during some of the toughest market conditions for the crypto market.

The same projects, and others that build on Polkadot, have bolstered the network’s potential for 2023. Now more than ever, Polkadot is in a better position to capitalize on the growth in the blockchain industry. It underlines the robust growth potential.

Polkadot has announced a new staking dashboard designed to make things easier for users. This is a move that could cause a huge increase in TVL in the coming months.

Evaluate the potential impact on DOT

The above observations conclude that Polkadot is already on healthy momentum in terms of growth. It is also preparing for further growth in the coming year.

But can investors and traders capitalize on that growth through its native cryptocurrency, DOT? The answer will depend on the demand it can force in the market.

DOT’s weighted sentiment metric registered a sharp rise at the end of November. Unfortunately, it was quickly hosed down, leading to dampened investor sentiment.

Polka Dot (D0T) Weighted Sentiment

Source: Sentiment

The increase indicates that investors were optimistic about DOT’s prospects. However, the rapid shift in sentiment indicates a lack of market confidence. It also failed to maintain strong volumes, suggesting that demand is still low.

Polka dot (DOT) volume

Source: Sentiment

While spot demand has been low, some observations in the derivatives market point to improvements. Demand for DOT has gradually improved since the last week of November, according to funding rates from Binance and DYDX.

Ask about Polkadot (DOT) derivatives

Source: Sentiment

Unfortunately for DOT holders, the improvements in demand for derivatives show no correlation to price. DOT experienced a price drop in November and the same trend continued into the first week of December. It was trading at $619 at the time of writing.

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