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Web3 Foundation Announces $40M in Grants for Polkadot Development

TL;DR

  • Web3 Foundation allocates $40M for Polkadot development.
  • Despite challenges, Polkadot sees robust ecosystem growth.
  • DOT faces a 93% drop since its November 2021 peak.

The Web3 Foundation, dedicated to the development of the Polkadot and Kusama ecosystems, is taking an ambitious step to invigorate Polkadot development with a substantial investment of $40 million. However, despite this major financial commitment, Polkadot’s native token, DOT, has been on a steady decline and is currently at its lowest level since August 2020.

In a bid to foster growth within the Polkadot community, the Web3 Foundation has unveiled a new initiative. The program aims to allocate 20 million Swiss Francs (approximately $22.1 million) and 5 million DOT tokens, valued at around $18.8 million, throughout 2024. This injection of capital is intended to bolster community-driven funding mechanisms from the Polkadot Treasury and support projects that hold the potential to shape the future of Polkadot.

The Foundation believes in the power of its community and is enthusiastic about the potential of the Polkadot ecosystem, despite the bearish sentiment surrounding its native token, DOT.

Polkadot’s native token, DOT, may be facing headwinds, but the ecosystem itself has been steadfast in its development. Data from Santiment reveals that Polkadot remains a strong player in the Web3 space in terms of development activity. Q3 saw an all-time high in the number of active core Polkadot developers, according to TokenTerminal. Furthermore, validator staking on the network has demonstrated stability over the period.

In addition, nomination pools have reached a significant milestone in Q3, surpassing 15,000 pool members by September. Notably, the top DeFi parachains on Polkadot, which include Acala Network, Astar Network, Moonbeam, Parallel Finance, and Hydra, collectively had a total value locked of $125.6 million by the end of Q3, with Moonbeam leading the pack at $37.4 million.

Polkadot’s native token DOT faces ongoing downturn despite ecosystem developments

Despite the promising developments within the Polkadot ecosystem, the native token, DOT, continues to experience a prolonged downturn. As of the latest data available, DOT has plummeted by 2%, trading at $3.76, marking its lowest point since August 2020.

This persistent bearish trend has led to DOT losing a staggering 93% of its value since reaching its peak of $55 during the bull market of November 2021. This decline has been disheartening for investors and the broader crypto community as Polkadot was once touted as the “Ethereum killer.”

Kusama (KSM), often referred to as Polkadot’s canary network, is also mired in a slump, mirroring the troubles of its sibling chain. KSM has experienced a significant drop, losing 97% of its all-time high value, landing it at a three-year low. The simultaneous downturn in both DOT and KSM prices raises questions about the broader sentiment surrounding the Polkadot ecosystem, despite its evident development momentum.

The Web3 Foundation’s commitment to inject $40 million into the Polkadot ecosystem is a clear signal of its confidence in the network’s long-term potential. By focusing on supporting projects that can shape the future of Polkadot, the Foundation aims to harness the creativity and dedication of the community to overcome the challenges currently faced by DOT and KSM.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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