- Polkadot disclosed that the upgrade, when implemented, would interact only with DOT
- Traders are betting on DOT’s price to increase in the short term
Polkadot is set to replace its Relay Chain with a new protocol called the “JAM Chain.” The team, through its co-founder Gavin Wood, made this known at the ongoing Token2049 conference in Dubai. According to Wood, JAM would combine the capabilities of Polkadot and Ethereum [ETH] to provide a permissionless, object-oriented environment for the ecosystem.
Exposé is great for the token
The project revealed that the environment would be similar to Ethereum’s smart contract system. However, the difference would be the scalable node network secured by Polkadot. Wood, in his statement, explained,
“When fully built out, JAM will be a distributed computer that can run almost any kind of task, that can be expressed as a service.”
Here, it’s worth noting that DOT would be the only token to interact with the JAM Chain. At press time, DOT was valued at $6.82 following a minimal hike over the last 24 hours.
DOT has been underperforming for a while, compared to its other layer-1 counterpart. On the contrary, now that Bitcoin’s [BTC] 4th halving has taken place and JAM is expected to be deployed later, DOT might just perform better on the price charts.
It is important to check the token’s potential using 0n-chain data, despite the possibility. For instance, at press time, AMBCrypto found that the Weighted Sentiment about the project had risen.
Previously, the sentiment was negative, indicating that the broader market was bearish on the project. This changed over the last 24 hours. If this remains the case going forward, demand for DOT might increase, and its price might go past $7.
Source: Santiment
On the other hand, Polkadot’s development activity dropped. On many occasions, the project has topped the development activity standings. Of late though, others like Chainlink [LINK] and Cardano [ADA] have toppled it.
A fall in the metric is a sign of waning commitment to shipping new features on the network. However, with the JAM Chain coming, that position could change for the better.
DOT is not near its top
Additionally, Polkadot’s social dominance climbed on the charts. At the time of writing, the metric had a reading of 0.782%. This implied that discussions related to the project have been rising, and traders are now keeping an eye on DOT.
As long as social dominance does not skyrocket further, DOT won’t hit a local top. Therefore, a price appreciation could be possible in the coming days.
Finally, DOT’s Funding Rate hit 0.01% despite its negative reading on 19 April. The positive funding could be interpreted as a sign that traders collectively believe in a possible upswing.
Source: Santiment
Realistic or not, here’s DOT’s market cap in ETH terms
If DOT’s price rises alongside the positive funding, the value might climb much higher than its press time price. However, traders might need to watch out as DOT might be overheated if funding gets too high.
In such a case, the price might depreciate on the charts.
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