Polkadot Smashes Into Market Cap Top Ten Following DOT Redenomination
Faith in Polkadot hasn’t been tarnished by the ham-fisted actions of Binance and Kraken, after the cryptocurrency exchanges commenced trading for DOT two days before the token was due to be redenominated, reducing its unit value by 100x.
Because the CEX listings preceded a scheduled token redenomination, the Polkadot community was, for a short time, exposed to two different token prices. Despite this, Polkadot was ranked as the seventh-largest cryptocurrency by market cap on Aug 25, following a 79% surge less than one week after trading officially commenced.
Polkadot Shakes Off Launch Troubles
On July 13, the Polkadot community voted in favor of a proposal that would see the DOT token supply increased by 100x. This resulted in the token supply changing from 10 million to 1 billion, while token holders saw their coin holdings multiply by 100x. This caused no change to the dollar value of the holdings, and was implemented only to make the value of DOT tokens more “ergonomic and human-readable.”
A grace period of three days between August 18 and August 21 was set for all DOT holders to transfer their old tokens into the new DOT tokens. Token listings for the new DOT token had already been secured on numerous major exchanges, with trading set to commence once the grace period was complete.
But when Binance and Kraken commenced trading for DOT on August 19, it caused massive price disparities between what were briefly two different DOT tokens. Because Binance and Kraken listed the token early, the price on those exchanges immediately sank to reflect the price of the newly minted DOT token, which had been divided by 100 during the redenomination.
However, Binance and Kraken failed to account for the redenomination, so traders were briefly deceived by what was essentially a bootleg version of DOT. According to the Polkadot community, these exchanges “went against the Polkadot community and created chaos and confusion among DOT holders.”
Polkadot Enters Top Ten
Despite this initial confusion, Polkadot entered the market cap top ten in the days immediately after DOT began trading in earnest. Immediately slotting into the seventh spot, Polkadot displaced Litecoin, Cardano, and Bitcoin SV in the process.
From a starting price of $2.74 earlier in the week, the value of DOT tokens underwent a 79% increase, climbing to $5.2 by August 25. Trading volume quickly rose to $500M per day, as traders pushed up the DOT price on Binance, OKEx, Kraken, Bitfinex, Kucoin, Bittrex, and more. Curiously, despite Binance being overly hasty regarding the timing of Polkadot’s token listing, the Binance-owned CoinMarketCap is yet to update its listings to reflect Polkadot’s new ranking.
Polkadot acts as a blockchain glue, connecting different blockchain projects under its umbrella. Using Polkadot, users can send tokens and assets from one blockchain to another, without sacrificing the security of either. Polkadot’s development is decentralized and voluntary and was founded by Gavin Wood, one of the original co-founders of Ethereum.