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The Polkadot token, which recently underwent a renaming, saw its value more than double in less than seven days. Now with a reported (but unverified) circulating supply of 897,657,920 tokens, the Dot token is claiming its place as the fifth-ranked token.
At the time of writing, the token was trading at $ 6.23, which results in a market cap of $ 5.63 billion. This market cap is almost enough for Dot to move the Link token from its current location.
Coinmarketcap officially ranks the token at number 2172. The market capitalization of a token or coin is determined by multiplying the price of a token by the circulating supply. Information on the Coinmarketcap website suggests that “the organization has not yet sufficiently verified the current supply and resulting market capitalization.”
However, there is another metric that apparently supports Dot’s status as a top-level token: the volumes traded. According to data from Coinmarketcap, the trading volumes of the Dot token on August 27 increased to $ 1.4 billion, a figure higher than Chainlink’s volumes of $ 1.28 billion on the same day.
In fact, Dot’s 24-hour trading volumes have exceeded $ 480 million since August 22. However, prior to this peak, the token’s previous trading volumes did not exceed $ 50 million. According to the data, on August 20 and 21, the token’s traded volumes were $ 48.8 million and $ 49.3 million, respectively.
These are the only known exchanges that occur just before the rename event.
Meanwhile, in a public notice explaining the renaming process on August 17, the Polkadot Network team said: “the renaming of the token (was) scheduled for August 21, 2020 at 16:40 UTC block number 1.248.328” .
The Dot token is used for governance, staking and bonding on the Polkadot network. The community had voted for the renaming which would take place on 21 August. The warning adds that after renaming, the “New Point is 100 times smaller than DOT (OLD)”.
Similar to a sharing split
Similar to a stock split, a renaming normally increases the circulating supply of a token while the market capitalization remains unchanged. The notice also attempts to clarify this point.
However, shortly after the renaming, the token price rose from the closing price of $ 2.88 on August 21 to $ 4.48 the next day. The token has since reached a high of $ 6.79, recorded on August 27.
Meanwhile, Dot’s price hike comes after the Polkadot Network team previously warned that “some unscrupulous exchanges may choose to enact the renaming before the date agreed by the Polkadot community.”
At the time, Polkadot’s team said such an act would result in the exchange of tokens “at about 100 times below the actual market price”. The statement, which does not give the names of the exchanges behind this plot, also adds:
“We believe that such action is irresponsible, could constitute fraud through misleading advertising and certainly puts Polkadot’s stakeholders at risk.”
Binance and Kraken would be the two exchanges accused to quote the token on August 18, three days before the agreed renaming.
Although the notice explained the renaming process, some supporters of the token were still unsure of the supply in circulation before August 21. For example, a Reddit user, SalesFromTheCrypt asked:
I know tomorrow is renaming day, so the total supply is 10 million to 1 billion and I have read on their website at least 20% (is) withheld for infrastructure. This means that from tomorrow it shouldn’t be more than 800 million, it could be less. But it is also an inflationary sign. Hopefully someone more knowledgeable will answer as I made sure I picked up a bag.
However, other users (perhaps the token holders) have expressed confidence that it would be worth billions and that it would immediately be in the top ten of the best-ranked digital assets.
Polkadot is the flagship project of Web3 Foundation, a Swiss foundation founded to facilitate a fully functional and user-friendly decentralized web.
What do you think of Polkadot’s price pump? Share your thoughts in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
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