Written by HASH CIB
Source: Chain News
Cryptocurrency investment agency HASH CIB released an in-depth research report on Polkadot. It is expected that the full-featured Polkadot mainnet will not go online before the end of June 2020, and cross-chain communication functions will not be launched quickly. The institution has been closely tracking the development progress of Polkadot, and it is expected that the Poldakot team may achieve the transfer of DOT tokens at the end of May at the earliest. Achieve cross-chain communication in -7 months.
The agency also pointed out that Polkadot has certain competitive advantages. In the current cross-chain circuit, due to problems within Cosmos's current organization and limited functions (only value transfer between chains can be achieved), Polkadot has a good chance to become this. Leader in a field. However, HASH CIB also pointed out that the large-scale new projects currently on the secondary market have experienced currency price drops, especially in the private equity round, where the highest-valued tokens have the largest drop, which is a challenge for the launch of large-scale public chain projects such as Polkadot.
HASH CIB also evaluated the Polkadot project in the report, valuing the project at $ 1.347 billion and estimating the price of the DOT token in mid-2020 to be $ 135. However, the agency also pointed out that "the valuation process is very simple, obtaining the target price is more subjective and all assumptions are questionable."
The following is a summary of the content of the Polkadot research report published by HASH CIB:
What exactly is Polkadot? Polkadot is a new generation blockchain infrastructure designed to be the backbone of the "Decentralized Internet" (so-called Web 3.0). It is one of the most important projects launched after Ethereum. The creator's design philosophy is: multiple public and private chains serving various industries support mutual transactions with each other, thus spawning in many existing and emerging industries New social and economic interactions. This magnificent and ambitious goal is far from reality. If this breakthrough idea is to become a reality, technology and needs must be agreed. But the real problem is that not only is blockchain technology developing slowly, but the demand for it has just begun to emerge.
What is the current industry development background? Stablecoin and decentralized financial DeFi are currently the main promoters of blockchain adoption. The total value of DeFi locked on Ethereum has exceeded $ 1 billion, and the total daily transaction volume of stablecoins exceeds $ 60 billion. The original huge volatility of cryptocurrencies has become a stumbling block for becoming a universal payment method, and stablecoins have eliminated this big obstacle that cryptocurrencies have become currencies. This should enable the promotion of blockchain projects from a "token appreciation" model to a "pervasive" model that enables currency holders to earn a portion of the network's "income". This token economics should be familiar to traditional investors, especially considering the need for a clear cash flow discount DCF strategy in this model.
Polkadot has a certain competitive advantage. Despite many efforts, there are still two major technical obstacles to the current development of blockchain-scalability and interoperability issues in a secure, trustless environment. The stubborn expansion problem still needs to be solved in many angles. The blockchain interoperability solution that Polkadot and its rival Cosmos finally built seems to be expected to solve the interoperability problem first. Polkadot's cross-chain interaction feature was previously launched in beta and should be officially released within four to seven months. Considering Cosmos's internal problems and limited expected functionality (only value transfer between chains), Polkadot has a good chance to be a leader in this field.
Be careful, the secondary market is in bad shape. The plunge of token prices for large-scale public chain projects is a big problem. The token prices of all large-scale projects listed in 2019 have plummeted, among which the private equity round has the highest plunge in tokens with high valuations. Among these new-generation projects, Cosmos is the only positive example, and the prices of Algorand, Hedera Hashgraph, Blockstack, and Orchid tokens have fallen by 50% -90%, respectively. Considering the current market attitude, if Polkadot's tokens are now listed, we expect unfavorable prices. However, such poor market performance does not negate the above items. Such market adjustments may provide far-sighted investors the opportunity to select future industry winners.
Polkadot Beta testnet to full featured mainnet timeline
We believe that the full-featured Polkadot mainnet and cross-chain communication functions will not go online until the end of June 2020. We expect the project to be able to transfer DOT tokens as early as the end of May. Polkadot's release process will gradually transform from an authoritative proof of PoA consensus network to a proof of stake PoS consensus blockchain, enabling cross-chain communication in 4-7 months. After being put into use, the demand for chain slots is very important for Polkadot, and the future development of the project is heavily dependent on it.
Polkadot Inflation Rate, Validator Returns and Pledge Rate
Initial users in the Polkadot target include existing blockchains, blockchain protocols / ecosystems and large-scale decentralized applications, as well as enterprises and cartel groups (such as banks, other financial institutions, and even government agencies). However, we do not expect its usage to rise sharply.
DOT allocation plan
Our valuation of Polkadot is $ 1.347 billion, and the estimated price of the DOT token in mid-2020 is $ 135. The process of our valuation is very simple, and obtaining this target price is also subjective, as there are currently few applicable pricing financial models. All assumptions are questionable, so we recommend that readers develop practical models based on their own assumptions.