Someone recently tweeted a timetable for different companies to realize trillions of dollars in assets. These assets include Google, Apple, Microsoft, Amazon and Bitcoin. Among these assets, Bitcoin has achieved trillions of dollars in assets in only 12 years. And the most amazing thing is that Bitcoin is a fully automated system that naturally forms trillions of dollars in assets. So the next very natural question is, which crypto crypto asset will be the next first to reach the trillion-dollar asset scale?
If we look at the current market value of crypto crypto assets, the market value of Polkadot and Cardano has entered the top five . I think these two public chain projects are very promising. But Polkadot has a greater chance of reaching trillion-dollar assets first. Polkadot has wider community support, and its ecological development has so far been far ahead. Polkadot’s current main development areas are in Europe and Asia, which can form differentiated competition with public chain projects dominated by the United States, which is conducive to the rapid development of Polkadot. Polkadot has also been very positive in terms of market influence. Judging from the recent trend of its currency value, it is obviously also recognized by speculators. So in general, Polkadot is likely to be the next crypto crypto asset that first reaches trillions of dollars in assets. However, for Polkadot to achieve this goal, its road will only be more tortuous than that of Bitcoin, and it is likely to take more than 12 years.
Facing a large number of competitors
First, Polkadot faces a large number of competitors. Polkadot is not the first in its product range. Ethereum is the pioneer in this product category. Like other public chain projects, Polkadot is trying to improve in this product field and become the best product. Therefore, it has to compete with Ethereum as well as many competitors. The development process of Bitcoin is completely different. Bitcoin is the first in its product category. Moreover, it has existed as a unique product for many years after its introduction, which gave it enough time to establish its influence in the market. As a result, there is no possibility of a second-place competitor in the market. So as long as there is a demand for such products in the market, it must be met through Bitcoin. So despite the twists and turns of Bitcoin’s development, it has always enjoyed a unique competitive advantage. But Polkadot needs to compete in similar products. Now it seems that its most direct competitor is Cardano .
Based on whether the introduction of legal tender as soon as possible a stable currency
Whether the stablecoin can be introduced as soon as possible is an important factor in determining the ecological success of all public chains, including Polkadot. At present, the most popular application on the public chain is DeFi . The DeFi foundation is stable currency. Now it is possible to generate stablecoins based on crypto crypto assets using mortgage methods. However, the number of stablecoins produced in this way is limited, and the volatility is very high. Because it fundamentally depends on the price of the crypto crypto assets mortgaged. Therefore, once the crypto crypto currency enters a bear market, the number of stablecoins produced in this way will be exhausted, and the application of DeFi cannot be developed. Therefore, for any blockchain ecology, the early introduction of a stable currency with a sustainable and stable supply and a scalable scale is the most basic element that determines the development of this ecology. In this regard, the upcoming Diem ecosystem has a very strong first mover advantage. This is because the Diem stablecoin is a basic product that was owned when the ecosystem started. Payments based on stablecoins are the most popular, the easiest to implement, and the most extensive applications. Once payment based on stable currency is launched, it will help to achieve network effects quickly. Therefore, the foundation of this ecology will soon be strengthened.
Will killer apps appear soon
In the blockchain-based ecology, only the rapid emergence of killer applications that are welcomed by the market can help this ecology achieve rapid development. Now it seems that the most likely killer application is payments based on stable coins. In other words, whether the payment application can be quickly developed determines the speed of the ecological development. As mentioned earlier, payment applications are the simplest and most effective application to establish network effects, and it is a long-term effective mechanism. I think the current DeFi boom cannot last. The reason DeFi is so popular is because participants can profit from it. The DeFi main users of speculators. Given the current bull crypto crypto currency, investment could exploit DeFi profitable opportunities. But I think the bull market will pass quickly, so DeFi- based applications will definitely decrease rapidly. This will not contribute to the development of blockchain-based ecology. Therefore, for the Polkadot-based ecology, the early development of stablecoin-based payment services will help it achieve long-term ecological development.
Can it be quickly accepted by the agency?
Whether Polkadot can truly achieve trillion-dollar asset scale, a key factor is whether it can be accepted by institutional clients. The reason why Bitcoin can now achieve a trillion-dollar market value is that since the second quarter of 2020 , institutions have begun to gradually buy. Such a trend will reach its peak in early 2021 . The purchase of institutional customers has pushed Bitcoin to a trillion-dollar scale. This factor also applies to Polkadot. But for now, Polkadot does not have a good development trend in this regard. If this problem is not resolved, Polkadot will certainly not be able to achieve the trillion-dollar scale.
The compliance status of Polkadot to be clarified
The regulatory requirements for crypto cryptocurrencies are different in various regulatory regions around the world. Polkadot’s operations in different regulatory regions are facing compliance risks. For example, in the U.S. market, the previous crypto crypto currency rating association CRC rated some tokens in the market that Polkadot’s security-type attributes are very strong. CRC scores from 1 to 5 in this rating mechanism, the higher the score, the closer to being defined as a security. The rating of Polkadot is defined as 3.75 . XRP, which is now being sued by the SEC , is rated 4.0 . Therefore, according to the current US securities laws, the probability of Polkadot being defined as a security is very high.
I think that Polkadot’s current market value of nearly 40 billion US dollars is not a true reflection of its value, but the result of market speculation. This is the same as the current state of the crypto market. At this stage, none of the applications have started running in the Polkadot ecosystem. Even if there are applications that start running in its ecology, the popularity of these applications by the market remains to be tested. Therefore, the current market value of Polkadot of nearly 40 billion US dollars is highly optimistic, or it can be said to be the result of speculation.
In general, I think Polkadot is very likely to be the next crypto crypto asset to be the first to realize the trillion-dollar asset scale, but this is only possible now, and there are still many risks in the future. But Polkadot’s product mechanism and the development of its current community do give it a very strong competitive advantage. At least for now, it is very likely to be the next crypto crypto asset to be the first to achieve a trillion-dollar scale