Polkadot’s Network Usage Remains Strong Despite Market Downturn

Polkadot’s network usage remains strong despite the recent market downturn and the reports show that the second quarter was quite strong as well despite the market turbulence so let’s read more today in our blockchain latest news.

The blockchain analytics company Messari published a report on Polkadot’s performance for the second quarter of 2022 and analyzed different aspects of the protocol like network usage, market valuation, parachains, and other network challenges. The paper dubbed the State of Polkadot revealed that the project’s native crypto asset shredded 66% of the market cap in three months. Polkadot’s network usage remained strong but it closed the last quarter with a $7.9 billion valuation which is down by $15 billion recorded in the first quarter which also represents a 86% drop from the ATH market cap of $49 billion.

The report noted that despite the huge slump in valuation, Polkadot continued to see some favorable developments in some aspects of the ecosystem, especially in network usage and developer activity. Messari pointed out that Polkadot’s network usage remained strong despite the huge market correction. While the user accounts remained consistent, the number of active monthly ones on the network increased by 30%. The proejct recorded 145,000 monthly users in Q2 with about 77,000 active ones and 68,000 new users comapred to the 149,000 per month and 56,000 active ones in the first quarter.

The consistency in user count showed the value of the DOT token transfers being made during both quarters and in Q2, Polkadot had an average of 293 million DOT transfers per month which is higher than the 288 million transfers from the first quarter. In the second quarter alone, DOT had an estimated 435,000 users with 878 million tokens being transferred. In addition to the network usage, the report showed that the developer activity was also quite impressive.

In 2021, the protocol had the second biggest developer community and in 2022, the developer activity on the network stayed consistent. As per Messari, the metric on Polkadot remains the strongest in the industry. Last month, the Polkadot creator Gavin Wood disclosed a proposal for the next generation of the DOT ecosystem governance. The report outlined there will be challenges to tackle but the project recorded strong network activity during the market crash.

Messari suggested that developing new functionality and use cases will help resuscitate the user interest and more activities on the network especially now that the network enabled XCM for cross-chain asset transfer. Also, Polkadot might have to continue to scale and connect more parachains to maintain its developer activity dominance.