$515.56 1.23%
ETH · 3w

DeFi on Polkadot: An alt chain with interoperability on the horizon

The Polkadot blockchain platform only launched its mainnet in May, but it is already pushing to become a major competitive force in the sector. In late August, following a DOT token redenomination, Polkadot smashed into the top 10 cryptocurrencies, overtaking established altcoins such as EOS, Litecoin (LTC) and others. 

Kelvin Koh from Asian crypto fund Spartan Black previously said that Polkadot could rank in the top three blockchains. Elsewhere, Dan Morehead from Pantera Capital Management also recently shared his sentiments with Bloomberg, highlighting that although Polkadot is currently trading at around 10% of Ethereum’s value, his firm believes it has a “much higher than 10% chance of being a competitor to Ethereum.”

Although there is endless speculation about which factors drive Ether’s price, one trend has emerged over its lifetime: As more developers build applications with user appeal and value, the price outlook of Ether looks more bullish.

If the same is true for Polkadot, then the analysts’ predictions look promising. The popularity of decentralized finance caused the price of ETH to double this summer. Now, DeFi developers also appear to be looking toward Polkadot, keen to take advantage of fast throughput, the Substrate development framework and ultimately — interoperability.

However, Peter Mauric, head of public affairs at Parity Technologies, told Cointelegraph that there is vast potential for Polkadot to expand the DeFi ecosystem beyond its current capabilities, saying that parachains are a different type of smart contract that will enable a different degree of implementation. He elaborated further:

“Once we have these turbo-charged DeFi primitives, the potential for new innovation is greatly expanded, and we see interesting new possibilities like decentralized Sovereign Wealth Funds and cross-chain money markets providing the basis for the next generation of DeFi protocols.”

Many of these new DApps and pa...

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