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DOT Price Analysis

Polkadot Price Analysis: DOT Announced a $777 Million Development Fund

Posted Tuesday, October 19, 2021 by
Arslan Butt • 2 min read

The Polkadot price analysis is slightly bearish on Tuesday; however, the upward trendline may underpin the coin at 39.35 today. Gavin Wood, the founder of Polkadot (DOT), has announced a $777 million development fund ahead of the network’s parachain leasing auctions. On October 17, Wood announced that Polkadot’s treasury had committed more than 18.9 million DOT (about $777 million at the time of writing) to a development fund that will be distributed through community governance.

DOT/USD Live Rate

POLKADOT

Wood provided broad suggestions as to how the cash could be spent, indicating that the capital will be used to accomplish the community’s mission of “growing, enhancing and teaching” Polkadot’s environment, as well as “anything else that the Polkadot governance considers worthwhile.”

Polkadot’s Wiki – Treasury monies can be used

According to Polkadot’s Wiki, the treasury monies can be used if approved by the council, which votes on propositions presented to them. The Polkadot council now has 13 members, but the council intends to expand to 24 seats at some point in the future.

With poor community participation in several Polkadot governance elections in the past, the development money may increase the engagement of  DOT holders in terms of the governance process. According to Polkassembly, three governance ideas that were put forward this week received zero, six and seven votes respectively.

Stakeholders who wish to submit a proposal must reserve at least 5% of the requested spend, with the deposit either slashed (a burn mechanism to prevent validator malfeasance) if refused, or returned if accepted. Polkadot’s cutting mechanism may be a factor that impedes governance engagement on the network, with funds at stake in the event of an unsuccessful vote.

The new development fund was also announced just weeks before Polkadot’s highly anticipated parachain auctions, which are set to begin in early November, implying that the money is intended to stimulate projects aimed at Polkadot’s upcoming parachain ecosystem.

Polkadot Price Analysis: Upward trendline to support DOT at 39.35

The DOT/USD has a slight bearish bias at the 40.92 level, holding above an immediate support level of 39.35. The closing of candles above the 39.35 level is likely to trigger a bullish trend until the next resistance level of 42 and 44.87. A breakout at the 44.87 level could expose the DOT/USD price to the 48.07 mark. 

DOT Price Analysis
DOT Price Analysis – Upward Trendline Support

At the moment, the support level continues to hold at around 39.35. On the lower hand, a breakout at the 39.35 level could lead the DOT/USD price towards the 35.10 level. The series of EMA also supports a bullish trend in the DOT/USD pair. So let’s consider staying bullish above 39.35, until the 44.87 level. Good luck!

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