Polkadot (DOT) In-Depth Analysis: From History and Milestones to Whether It Can Compete Again with Mainstream Public Chains

As of December 17, 2025, Gate shows DOT price at approximately $1.87, down about 1.1% in 24 hours, with a trading volume of $140 million.

Looking back at history, since the DOT split in 2020, the supply of DOT has increased from the initial tens of millions to hundreds of millions, which has changed people’s intuitive understanding of the price per token (similar to stock splits). Polkadot’s design goal has always been clear: to serve as the “hub of cross-chain interoperability,” enabling different blockchains to securely exchange information and assets without trust assumptions.

The Past and Present of Polkadot

Polkadot originated from the ideas proposed by Gavin Wood and others in 2016, driven by teams like Web3 Foundation and Parity. Its goal was to turn the question of “how multiple blockchains coordinate” into a practical infrastructure. Technically, it provides security and consensus via the Relay Chain, while Parachains handle specific applications, achieving a division of labor where the main chain ensures security and parachains focus on functionality. Polkadot also makes it easier for developers to build custom chains through the Substrate framework. The project launched its mainnet in 2020, and by the end of 2021, it entered the parachain auction and ecosystem expansion phase.

Development Milestones

(Note: The milestones listed above are those with the greatest impact on the project’s ecosystem evolution, helping to understand how Polkadot has transitioned from concept to multi-chain operation over time.)

The Role of DOT in the Ecosystem (Token Use and Economic Model)

DOT’s functions fall into three main categories: governance, staking, and bonding/lease (for parachain slots). In governance, DOT holders participate in on-chain proposals, voting, and committee selection; in staking, DOT is used to nominate and validate nodes to secure the network, with stakers earning inflation rewards; in bonding, projects participating in parachain auctions must lock DOT as a “bond” or raise funds via crowdloan to secure parachain slots. The token issuance mechanism is moving toward a more stable linear annual issuance between 2024–2025 (e.g., fixed annual issuance distributed to stakers and treasury) to balance security incentives and inflation.

Advantages of Polkadot: Why It Was Once a Star Project

Polkadot’s core competitive advantages are quite clear:

• Its shared security model (Relay Chain) allows smaller chains to “borrow” the security of the entire network without building costly validator systems themselves.
• The Substrate framework lowers the barrier to developing custom chains, attracting many projects.
• The parachain economic model (auctions + crowdloans) creates a fast-start path for ecosystem development.
• Inter-chain messaging (e.g., XCMP) provides technical support for cross-chain dApps.

All these technological and governance innovations once made Polkadot a leading platform for “multi-chain interoperability.”

Challenges Faced: Why DOT Has Experienced Significant Retracement from Highs

Despite a clear technical path, Polkadot faces straightforward real-world issues. First, the scarcity of parachain slots leads many excellent projects to spend large sums (via crowdloans) to win slots, causing early ecosystem focus to be on “who can win slots” rather than long-term development. Second, user activity and TVL (on-chain value) haven’t accumulated naturally like Ethereum; many applications prefer to develop on Ethereum Layer 2 or other high-performance chains, resulting in less ecosystem appeal to end users. Additionally, cross-chain bridges and interoperability are still immature or have security concerns, which damages market confidence in “multi-chain” infrastructure tokens, often leading to sharp sell-offs. Lastly, macroeconomic and industry cycles amplify the correction of overhyped narratives during downturns. These structural and market reasons together have caused significant adjustments in DOT and many other infrastructure tokens.

Can Polkadot Still Compete with Mainstream Public Chains? A Pragmatic Evaluation Framework

To answer this, it helps to break down the criteria into observable dimensions and provide practical conclusions.

Developer and Ecosystem Activity (Developer momentum)

• Indicators: active repositories, commit frequency, number of on-chain dApps, support from core teams and foundations. Substrate remains attractive, but converting developers into long-term users and TVL depends on the application ecosystem itself.

1. User and TVL (Can users stay?)

• Indicators: monthly active users, transaction volume, cross-chain liquidity, stablecoin and DeFi TVL. Ethereum + Layer 2 networks have very strong network effects; Polkadot needs differentiated scenarios or lower user entry barriers to compete for users.

2. Performance and Cost (Throughput, latency, fees)

• Indicators: transaction throughput, confirmation times, actual usage costs. Polkadot’s parallel processing design has clear theoretical advantages, but whether it can sustainably maintain low costs and support large-scale applications in practice remains to be seen.

3. Interoperability and Bridges (True cross-chain)

• Indicators: secure bridging solutions, interoperability with Ethereum/Bitcoin mainnets. Polkadot’s XCMP and bridge designs are highly anticipated, but security and user experience are critical for actual adoption.

4. Governance and Economic Sustainability

• Indicators: staking rate, inflation/reward curves, governance efficiency. Polkadot demonstrates governance evolution through on-chain voting and adjustments (e.g., supply cap votes), but governance also carries risks of decision swings.

Overall, Polkadot remains competitive but is not the “inevitable winner” in all aspects. Its advantages lean toward providing infrastructure templates and security layers for multi-chain and custom chains. To compete in end-user, DeFi, or NFT verticals against Ethereum/L2, Solana, Sui, etc., Polkadot needs breakthroughs in more efficient user onboarding, seamless bridging, and the creation of exclusive, network-effect-driven killer apps. In other words, Polkadot is more likely to establish long-term positioning in “infrastructure + enterprise chains” and “vertical markets” rather than dominating all mainstream public chain tracks.

Practical Conclusions for Investors and Observers

Short-term: DOT’s price will remain highly sensitive to market sentiment, macro liquidity, and industry cycles, with higher volatility expected around significant changes in supply policies, staking rates, or auction activity.

Mid-to-long-term: Focus on three key aspects—whether parachain ecosystems can incubate applications that continuously attract users (beyond slot economics), whether cross-chain bridges and interoperability become secure and seamless, and whether governance and economic models (inflation, supply cap) stabilize and are accepted by the market. If these three points are gradually realized, Polkadot could solidify its ecosystem value as a “layer of interoperability and shared security”; otherwise, its role may be closer to a “technology stack provider,” with value mainly in developer and institutional layers rather than mass-market on-chain liquidity.