Key Insights
- Polkadot’s month-to-month transactions rose from 20 million in January to almost 60 million in November 2024. This 200% improve was pushed by sturdy efficiency from rollups like Neuroweb and Frequency.
- Polkadot improved interoperability after launching Snowbridge, a trustless Polkadot-Ethereum Bridge and Hyperbridge, which leverages zk-proof and coprocessor know-how to securely switch property throughout a number of chains, together with Ethereum, Optimism, Arbitrum, Base, BNB, and Gnosis.
- Polkadot’s Spammening check on its dwell sister community, Kusama, reached 143,343 TPS at 23% capability, with a projected 623,000 TPS at full utilization. The community maintained steady efficiency underneath heavy masses.
- Polkadot stays a number one hub for blockchain innovation and helps over 1,200 month-to-month energetic builders who profit from its native SDK, beforehand referred to as Substrate.
- DOT’s market capitalization rose by 71% QoQ to a two-year excessive of $16.4 billion and signaled sturdy investor confidence.
Primer
Polkadot (DOT) is a distributed blockchain computing platform that acts as a base layer for different sovereign blockchains, initially referred to as parachains, for validation and shared safety. Polkadot was constructed utilizing Substratet, a blockchain developmental framework now higher generally known as Polkadot SDK. Moreover, Polkadot’s base layer is named the Polkadot Chain (aka Relay Chain), which makes use of a Nominated Proof-of-Stake (NPoS) consensus mechanism, and its state machine is compiled to WebAssembly (Wasm).
The Polkadot Chain’s core operate is to validate and supply safety to its rollups. Agile Coretime, launched throughout Q3 2024, enhances the community’s scalability, cost-efficiency, pace, and adaptability by dynamically allocating computational assets. This characteristic replaces the earlier system of leasing single cores by auctions with an on-demand blockspace mannequin, adjusting useful resource availability primarily based on community demand. This method helps forestall useful resource wastage in periods of low exercise and mitigates congestion throughout peak occasions.
Lastly, parachains (rollups) on Polkadot can talk with each other by the Cross-Consensus Mechanism Format (XCM). The XCM is a messaging format that standardizes messages between Polkadot’s chains, permitting for better interoperability.
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Key Metrics
Ecosystem Evaluation
Rollup Extrinsics
Transaction exercise throughout the Polkadot ecosystem elevated sharply within the second half of 2024 and rose by roughly 200%. Month-to-month transactions grew from 20 million in January to almost 60 million in November 2024. Neuroweb, developed by Origin Path, led in This fall 2024 with a median of 26 million month-to-month transactions and recorded a 136% QoQ improve from 12 million in Q3. Frequency additionally skilled a surge in exercise and rose from a month-to-month common of seven million month-to-month transactions in Q3 to a month-to-month common of 9 million in This fall. Phala, Litentry, and Mythos additionally contributed to Polkadot’s rising transaction quantity.
This surge in exercise was additional fueled by the adoption of cross-chain bridges like Snowbridge. This trustless bridge, connecting Polkadot and Ethereum, launched in June 2024 and has seen appreciable adoption, with TVL exceeding $70 million by 2024 year-end. Snowbridge permits token transfers between the 2 networks, which contributed to the general improve in transaction quantity on Polkadot. Its key options, akin to group possession, trustless operation, and XCM compatibility, have made it a preferred selection for customers trying to transfer property between Polkadot and Ethereum.
On November 7 2024, Polkadot launched Hyperbridge, the primary verifiable, multichain bridge connecting Polkadot, Ethereum, Optimism, Arbitrum, Base, BNB, and Gnosis. Hyperbridge improves blockchain interoperability by using a coprocessor mannequin for advanced computations and using zk-proofs with onchain finality validation to strengthen safety. Two testnet cycles proved Hyperbridge’s effectiveness, which processed over 600,000 cross-chain messages. Sixty-six impartial relayers validated the community. This method tackles safety challenges related to conventional cross-chain approaches, akin to variations in consensus mechanisms and information mobility.
The interoperability approaches launched this quarter have strengthened Polkadot’s utility and set a benchmark for cross-chain communication. As these applied sciences proceed to mature and acquire adoption, Polkadot is well-positioned to assist a extra interconnected and environment friendly decentralized ecosystem.
XCM
The Cross-Consensus Message Format (XCM) is a standardized messaging format and language that allows seamless communication between rollups and different consensus-driven techniques. XCM performs a vital position in facilitating interoperability and sophisticated cross-consensus interactions. It permits blockchains to change messages, carry out operations, and switch property, amongst different use circumstances.
In This fall 2024, Polkadot’s XCM exercise elevated. Each day XCM transfers averaged 1,841 (+53% QoQ), and different messages averaged 255 each day (+300% QoQ). With a median of two,096 per day, whole each day XCM messages elevated by 66% QoQ.
The quarter noticed an enlargement of high-yield farming alternatives throughout the Polkadot ecosystem. Bifrost launched a 1 million DOT incentive program in October 2024, which focused liquidity swimming pools on platforms like StellaSwap and Beamswap. The impression was speedy, with the BNC-DOT pair on StellaSwap reaching a 423% Annual Proportion Fee shortly after this system’s launch.
The success of those incentive applications was evident within the fast development of TVL throughout varied swimming pools. As an example, the vDOT-DOT pool on StellaSwap skilled a twentyfold improve in TVL, reaching $622 million by late October, whereas nonetheless sustaining a 19.92% APR.
Rollup Addresses
Regardless of the rise in transaction quantity throughout This fall, energetic addresses within the Polkadot ecosystem declined. The common variety of each day energetic addresses fell to 11,500 in This fall from 14,000 in Q3. In This fall 2024, the typical month-to-month energetic addresses on Polkadot’s Relay Chain reached 122,919, whereas rollups recorded a median of 68,847. Amongst rollups, Moonbeam, Acala, and Mythos ranked highest by energetic addresses with market shares of 15%, 3.6%, and a couple of.7% respectively in the course of the quarter.
Improvement
Polkadot boasts one of many largest developer bases within the crypto trade. In accordance with Electrical Capital, in October 2024, Polkadot had 1,261 month-to-month energetic builders, with 460 of them categorized as full-time, putting the community fourth behind Ethereum, Base, and Polygon. Artemis additionally tracked developer information and reported a median of 117 weekly energetic core builders and 420 energetic ecosystem builders in This fall 2024.
Monetary Evaluation
Market Capitalization
After cooling off with the broader market in Q3 2024, DOT’s market capitalization expanded in This fall. Throughout This fall 2024, DOT’s market capitalization elevated 71% QoQ, from $6.2 billion to $10.2 billion. It peaked in early December at $16.4 Billion — a two-year excessive. DOT’s market cap rank shifted from 16 to 19 throughout This fall 2024, rating it above Bitcoin Money and Pepe.
Transaction Charges
The Polkadot Chain’s whole transaction charges tends to be comparatively decrease in comparison with its rivals because of the community’s structural design. In This fall 2024, the Relay Chain benefitted from Polkadot’s ecosystem rising transaction quantity. The Relay Chain went from capturing $113,737 in charges in Q3 to $492,141 in This fall, a 333% QoQ improve. The common transaction charge elevated from $0.02 to $0.03.
Treasury
The Polkadot Treasury is financed by block rewards, validator slashing, transaction charges, and staking inefficiencies. Treasury funds held in a system account are allotted for expenditures inside a 24-day spend interval, with any unspent funds topic to a 1% burn. Notably, all treasury expenditures are executed mechanically on-chain. The passage of OpenGov has reworked the referendum lifecycle and decentralized the decision-making course of, resulting in elevated treasury exercise.
The Polkadot Treasury expanded its asset distribution throughout the relay chain, Asset Hub, and the Hydration chain to handle property akin to DOT, USDT, and USDC. In accordance with Dotlake, Treasury spending in 2024 elevated 3.2 occasions in comparison with 2023. Allocations included $58.8 million for outreach efforts, $28.7 million for growth, and $17.2 million for economy-related initiatives. Spending reached its highest ranges in April and Could earlier than regularly declining within the following months. The Polkadot Treasury steadiness on the finish of This fall 2024 was $168 million.
Provide
Polkadot’s native token DOT serves three major functions: governance, staking, and accessing blockspace. DOT has an inflationary financial coverage and no most provide. Its financial coverage adjusts in line with community circumstances, rising staking rewards when the staked quantity falls under the supreme price to stop safety compromises, and reducing rewards when the speed is exceeded to take care of liquidity.
In July 2023, Polkadot launched a new burning mechanism for revenues from its coretime mannequin, following group consensus. This variation directs all coretime revenues to be burned, whereas sustaining a gradual treasury influx by a assured portion of the inflation price. Particularly, the treasury now receives at the least 20% of annual inflation if the perfect staking price (60%) is achieved, resulting in a lower in staking rewards from 16.67% to 13.33%. The group additionally voted for a lower in inflation to additional scale back the utmost inflation price from 10% to eight% within the first yr, then additional regularly reducing, which might convey staking rewards right down to 10.67% underneath related circumstances.
Burning coretime revenues marks the second burning mechanism inside Polkadot, alongside the prevailing follow of burning 1% of treasury funds month-to-month. Whereas the preliminary impression of coretime burning will probably be small on account of present lease commitments expiring in 2026, it’s anticipated to regularly develop over time.
As of This fall 2024, Polkadot’s provide metrics included a circulating provide of 1.5 billion (+7.3% QoQ) and a staked provide of 782 million DOT, leading to 51% of the eligible provide being staked (+13.4% QoQ).
Community Evaluation
Utilization
The central Polkadot Chain (aka Relay Chain) has a number of major features, together with securing and connecting rollups. Consequently, finish customers usually transact and use the community primarily by the rollups. The Polkadot Chain does assist some end-user functionalities, together with token transfers, staking, validator elections, and governance voting. With RFC-0032: Minimal Relay, it’s proposed emigrate a number of of those subsystems into system rollups.
Polkadot Chain exercise elevated in This fall 2024. Each day energetic addresses elevated to 9,000 (+45% QoQ), each day returning addresses elevated to six,700 (+28% QoQ), and each day new addresses elevated to 2,300 (+139% QoQ).
Safety
Polkadot makes use of a Nominated Proof-of-Stake (NPoS) mannequin designed to decentralize the validator set. Validators obtain funds each 24 hours primarily based on their completion of payable actions generally known as period factors. This mannequin incentivizes nominators to stake with lower-staked validators to earn greater rewards, leading to a constantly decentralized validator set. The variety of energetic validators elevated to 500 on account of referendum 888, which allows two approval voting protocol enhancements.
The Web3 Basis launched the Decentralized Nodes Program in October 2024 to assist validators. Validators can apply for as much as two nodes per community, chosen primarily based on technical experience, reliability, and ecosystem engagement. Chosen contributors serve a four-month time period beginning in November 2024, with potential renewal.
As of This fall 2024, there have been 31,200 nominators (-14% QoQ). Nomination Swimming pools, which permit customers to pool their DOT tokens collectively on-chain to appoint validators and obtain rewards, numbered 233 on the finish of This fall 2024 (-1% QoQ).
Governance
OpenGov, the brand new governance mannequin for Polkadot, has reworked the referendum lifecycle and decentralized the decision-making course of. The system permits a number of referenda to run concurrently, enabling quicker decision-making. The Council and Technical Committee have been changed by the Fellowship, a developer DAO that ensures decentralization by group voting, checks and balances, and versatile delegation primarily based on conviction and token dedication.
Governance participation elevated considerably in 2024. Referenda submissions rose by 150% and voter turnout by 40% in comparison with 2023. Probably the most vital governance actions of the quarter was Referendum 1200, which elevated the energetic validator set measurement from 400 to 500. This variation handed with 99.7% of votes in favor (1.2 million DOT). One other notable referendum included Referendum 1271, which set Polkadot inflation to 120 million DOT per yr. The proposal aimed to offer a extra predictable and sustainable financial mannequin for the community. The group’s skill to make such financial choices reveals the decentralized nature of Polkadot’s governance mannequin.
The Spammening
A current report on Polkadot’s Kusama community supplies insights into its scalability and stability by a large-scale stress check referred to as The Spammening. This experiment befell between November and December 2024 and examined the community’s efficiency underneath excessive transaction masses in real-world circumstances. The outcomes confirmed that Polkadot reached a peak throughput of 143,343 transactions per second (TPS) whereas utilizing solely 23% of obtainable computing assets. If all 100 cores have been utilized, the community’s theoretical throughput might exceed 623,000 TPS.
The check included two approaches. Parity Applied sciences performed a network-wide stress check, whereas a separate community-driven check concerned contributors manually producing transactions. Each assessments ran on dwell networks with energetic financial exercise, offering a sensible view of Polkadot’s capabilities. The experiment utilized Polkadot 2.0 options akin to Asynchronous Backing, Agile Coretime, and Elastic Scaling. These upgrades improved transaction throughput and useful resource administration. The community maintained steady block occasions of round six seconds, and finality remained constant at roughly 16 seconds.
A comparability with different blockchain networks confirmed Polkadot’s technical benefits. Kusama dealt with extra transactions per second than networks like Solana and Aptos, even with restricted assets. These outcomes present that Polkadot can assist high-demand purposes DeFi and gaming. The report additionally examines the complexity of measuring efficiency inside Polkadot’s multichain structure. As an alternative of counting on conventional TPS metrics, it suggests utilizing mixture throughput and validator effectivity for a clearer evaluation.
Future plans embody further assessments to additional analyze efficiency and scalability underneath completely different circumstances. Upcoming stress assessments will happen on Polkadot’s fundamental community, the place greater node capability and stronger connectivity might result in higher outcomes. These efforts construct on present findings and set new benchmarks for blockchain efficiency in real-world environments.
Roadmap
Polkadot’s core know-how advanced in This fall 2024 with developments that improved present capabilities and laid the groundwork for Polkadot 2.0. The quarter noticed enhancements supposed to extend community effectivity and scale back entry boundaries for builders. Asynchronous Backing and Agile Coretime have been absolutely applied and contributed to the surge in transaction volumes throughout parachains. The ultimate piece of the Polkadot 2.0 structure, Elastic Scaling, is because of go dwell earlier than the top of Q1 2025.
Constructing on these enhancements, Polkadot centered on additional technological developments:
- JAM Know-how Improvement: On November 11, Gavin Wooden shared insights into Polkadot’s JAM (JOIN-ACCUMULATE MACHINE) know-how by a worldwide tour of lectures, shows, and weblog posts. This signaled a push for broader understanding throughout the ecosystem. On November 29, Parity Applied sciences launched the Polkadot JAM Rust SDK. This supplies builders with instruments to construct on the community utilizing JAM know-how. This launch helps the developer group and helps progress throughout the ecosystem.
- Developer Instruments and SDKs: The introduction of the Polkadot Unity SDK for Gaming by Ajuna Community empowers sport builders to combine blockchain into their initiatives. Unity powers over 50% of the highest 1,000 cell video games worldwide, positioning this SDK as a possible driver for Web3 gaming adoption. Moreover, new APIs, together with the XCMFee Fee Runtime API and XCMDryRunApi, have been launched to enhance cross-chain effectivity.
- Roadmap to Polkadot 2.0: Developments in This fall 2024 aligned with the broader aim of absolutely implementing Polkadot 2.0 in 2025. Gavin Wooden emphasised horizontal scaling as the popular method, which aligns with Polkadot’s decentralized nature. The roadmap consists of the idea of a JAM Grid, designed at making a decentralized Web3 supercomputer, alongside rebranding efforts to simplify person interactions.
- The main focus of engineering collective Parity Applied sciences, the primary technical contributor to Polkadot, is the launch of Ethereum-compatible sensible contracts, native to Polkadot, amid widespread enhancements to the prevailing developer expertise, together with decrease boundaries of entry, ultra-low prices, and simpler entry to stablecoins.
Polkadot’s technical growth continues with efforts to increase transaction capability, present higher instruments for builders, and optimize community operations. As Polkadot 2.0 nears, these modifications are anticipated to extend system efficiency and compatibility throughout the ecosystem.
For a deep dive on Polkadot 2.0, take a look at our report Polkadot 2.0 Rebirth: An Overview.
Closing Abstract
Polkadot skilled a surge in transaction quantity and technical progress in This fall 2024. Month-to-month transactions climbed to 60 million by November, with Neuroweb and Frequency within the lead. Agile Coretime launched a dynamic useful resource allocation system, which optimizes scalability to fulfill demand fluctuations. With the launch of Snowbridge, a trustless Polkadot-Ethereum Bridge, and different cross-chain options like Hyperbridge, asset transfers grew to become extra environment friendly and dependable.
By December, DOT’s market capitalization had grown 71% QoQ, reaching $16.4 billion at its peak. Transaction charges adopted swimsuit, rising in response to better community exercise. Treasury spending supported outreach and growth by channeling assets into initiatives that expanded the ecosystem. OpenGov restructured governance, which helped streamline decision-making and inspired broader group involvement. Wanting forward, Polkadot plans to finish the transition to Polkadot 2.0, paving the best way for the introduction of radical new applied sciences like JAM, which includes a whole substitute of the Polkadot Chain (aka Relay Chain).
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