We are going to try something new with this article. We will split this article in half, to make sure some of the important information is given to anyone who visits the site. At Coinbusters we are passionate about educating the public on crypto. Trading the narrative is a way to speculate on which crypto to buy, we are seeing this today with Polkadot. This section is part 2.
What Solana Taught us
Polkadot just pumped almost 25% today, PDEX has just started to match the hype. Polkadot season is incoming. If you have not read part 1 of this article, please check it out [Part 1]. With part 1 in mind, we use the phenomenon we saw with Solana to investigate the Polkadot ecosystem. When Solana had its massive pump upward, the wise investor could have bought into a variety of more obvious ecosystem plays with varying risk to reward potential. Solana even offered this opportunity twice this year. The first meteoric rise brought Solana from 3-4$ to a high of 56$ in 3 months. After Solana cooled off, a massive buying opportunity was presented. From June to the end of August, if investors accumulated, they were rewarded with a repeat of the process. Solana rose from 20-35$, first to the 75$ range, then blasted upward to a high of 213$, Solana is now cooling off again from profit taking. The even more wise investor, who made the most money from this process, was the investor who bought lower market cap plays within the Solana Ecosystem itself. Dex plays are usually a fairly safe bet, Raydium and Serum had massive runs when Solana took off. Audius, which is now heavily integrated into Solana was a mere 15 cents, now over 2$.
Translating this to Polkadot
Using the above knowledge, we can prepare for the same process. Obviously if you were in some of these projects before today’s pump, you are far ahead of the game. We have long since believed that Polkadot did not get the pump it deserves, it is still not at the all-time high. Polkadot just dropped massive news, parachain auctions are set to begin on November 11th [1]. If you have read our intro article on Polkadot, you will understand the gravity of this news, check the article out for more information [Polkadot]. There are some projects we have not listed, also there some like [Acala] that do not yet have a token to purchase. We believe Acala will get the first slot along with Moonbeam.
I have already solidified my entry into PDEX by dollar cost averaging during the bear period this year. Otherwise I am most bullish on Phala, Kylin and Litentry. Phala was built on substrate, Polkadots native coding language, Phala aims to help create a confidential cloud network on chain. Phala separates its consensus mechanism from computer computation, increasing scalability[2]. Phala will be able to provide computing power to other blockchain systems while maintaining privacy. Kylin is positioning itself to be the first mover Oracle for the Polkadot ecosystem. Kylin can be compared to Chainlink but with a much smaller market, cap, think risk vs. reward. Oracles are incredibly important, as they provide price feeds and other data from the outside world, they bring it to the blockchain. Since Kylin was also built on substrate, it will be prepared for early usage when parachains go live. Litentry or LIT is a very unique project, they aim to consolidate digital identifies from multiple networks bringing them to a universal platform. This digital identity could include credit scores, educational verification and KYC [3].
Do Your own Research
We have provided a large ecosystem for review; please use the knowledge we have presented to form your own opinions on these projects. While I only own PDEX at this time I am heavily investigating the Polkadot ecosystem for swing trades and potentially long term HODLing. If Polkadot pumps like we saw with Solana these smaller cap projects will offer outstanding gains. This combined with our general Polkadot thesis make us very bullish on the network. The key alpha to take away from this writing is that the smart money invests in these narratives WAY before they pump in price like we saw with Polkadot today. We dollar-cost averaged Polkadot all year long to have a great allocation for this market cycle. In the future we will be sharing our opinions on coming narratives and what might be worth checking out.
[3] https://8e05e2d3-ada2-45dd-8426-b69a066e9210.filesusr.com/ugd/760d3a_2801034aeb0e400bb0e5850d1240f53b.pdf
