The DOT price is aiming for new highs, and investors are betting that the ongoing Polkadot parachain auctions will boost the price. A number of contenders are expected to participate in Polkadot’s first parachain auctions.
The upcoming parachain auctions for Polkadot are anticipated to put positive pressure on the price of DOT due to participants buying tokens to contribute to crowd loans, which effectively removes the tokens from circulation for two years
Parachains are an important part of the Polkadot vision and structure. They are designed to connect to Polkadot by leasing a slot on the Relay Chain for up to 96 weeks with an option to review
With the launch of crowd loans in June 2021, the price of Kusama, which is built on almost comparable codebases and same underlying architecture as Polkadot, skyrocketed. Polkadot is anticipated to continue on its trajectory.
Parachains are project-specific blockchains built on top of the Polkadot (DOT) and Kusama (KSM) networks. The main blockchain, known as the Relay Chain, is regarded as the backbone of the Polkadot and Kusama networks. Parachains can be customised for a variety of use cases and feed into it.
With eleven sets of parachain auctions scheduled to take place weekly between November 11, 2021 and March 10, 2022, the price of DOT is likely to rise as long as demand for parachain access remains high.