Polkadot’s token shot up to top $40 for the first time in five months after a likely date for parachain auctions was set.
The auctions on November 11 will bring the interoperable multichain network closer to a real-world launch.
Polkadot parachains can share data and link to external blockchains like ethereum, and could unlock new services like DeFi and NFTs.
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Polkadot’s token surged to top $40 for the first time in five months after the project set a date for its first parachain auctions, getting closer to a real-world launch of its multi-blockchain framework.
Parachains are separate layer 1 blockchains that can run in parallel and send data to each other. They bring a multichain architecture of several networks to polkadot, and they can enable other layer 1 protocols like ethereum and bitcoin to seamlessly connect.
The polkadot team has been testing its parachain technology and process on its guinea-pig network kusama, to make sure they are battle-tested for launch. It has now set a likely date of November 11 for accepting bids to build on polkadot.
“This means that over the coming year, we’ll finally witness a lot more interoperability across blockchains,” Eliézer Ndinga, research lead at crypto exchange-traded products provider 21Shares, told Insider.
“(This) will improve by orders of magnitude the user experience, to unlock the next wave of user-owned internet services that we already see in the following sectors: financial services (DeFi) – media, art and games (NFTs),” Ndinga added.
A parachain can be modified to carry out specific DeFi functions. Plus, what polkadot has set out to do could enable different blockchains to work together as part of one ecosystem – which could bring in the “Wi-Fi” crypto adoption that cardano founder Charles Hoskinson has described.
Altcoins such as polkadot have been on a tear this year, though some analysts believe they are still undervalued, given their promise for new applications. Over 2021 so far, the coin has risen by almost 852%, according to Binance data.
James Butterfill, investment strategist at CoinShares, told Insider he sees the finalization of the parachain disputes and code audit completion as key to the Polkadot price rising to near all-time highs.
“It’s an important hurdle to overcome, with it now setting the path for the parachain auctions,” Butterfill said.
The initial batch of five auctions will feature one new auction weekly. Each auction on Polkadot will assign a parachain slot for a total of 96 weeks, making it an ongoing process.