Polkadot price has trailed other leading layer 1 tokens in 2024 as concerns about its ecosystem remain. DOT has dropped by over 20% this year as other coins like Ethereum, Tron, Toncoin, and BNB have risen by double digits.
Polkadot has underperformed the market because of a general belief it has a relatively weak ecosystem compared to peers like Ethereum and Solana. Notably, Ethereum boasts some of the largests players in the industry in its ecosystem, including Lido, Maker, Compound, RocketPool, Uniswap, and Aave.
Similarly, Solana is home to most of the popular meme coins like dogwifhat (WIF), Popcat, and Book of Meme (BOME). It also has fast-growing DEX exchanges like Raydium, Orca, and Jupiter in its ecosystem.
A look at third-party data shows that Polkadot’s ecosystem has not been as vibrant, which explains why its token has underperformed the market and why some investors believe that it is a ghost chain. Data by DeFi Llama shows that Acala Network’s total value locked (TVL) has dropped to about $60 million while the amount of stablecoins in its platform stands at just $61,000.
Other parts of the Polkadot ecosystem like Centrifuge, Interlay, and HydraDX have seen little traction among developers and investors.
Crypto analyst is bullish on Polkadot price
Despite this gloom, one of the more notable crypto experts has a bullish stance on the token. In an X post, Rekt Finance noted that Polkadot is his favorite layer 1 crypto right now.
He cited the fact that Polkadot had entered the artificial intelligence (AI) race through platforms like Phala Network and Origin Trail. Phala Network, a platform on Polkadot, has started to offer AI coprocessor solutions with over 34k online workers and 150,880 vCPU in its network. Its solution helps developers build AI agents that closely integrate with on-chain smart contracts.
OriginTrail, on the other hand, provides verifiable internet for AI with Decentralized Knowledge Graph (DKG). It does that by leveraging the synergies of crypto, internet, and artificial intelligence technologies. By doing that, it helps to address challenges like misinformation, data ownership, and intellectual property.
Polkadot has also moved into the Real-World Asset (RWA) tokenization, which is expected to be a multi-billion dollar industry. Some of the RWA platforms in its ecosystem are Centrifuge, Energy Web, and Phyken Network.Still, while Rekt is bullish on Polkadot, its recovery will likely depend on the performance of Bitcoin and the vibrancy of its ecosystem.