Crypto Conversation: Right on the ‘Dot’
What’s hot in crypto this week?
Polkadot. It was created as a solution to Ethereum’s scalability obstacles — mainly that the Ethereum network can’t handle as many transactions per second on the scale as other payment systems can. Polkadot hopes to solve this issue through the use of a process called “sharding.” That’s where instead of each node on the network having a full version of Ethereum’s transaction history, the data is split up into shards and distributed. This allows the Polkadot network to validate transactions much faster than Ethereum can, at a lower cost.
Ethereum fees are going through the roof, making alternative solutions such as Polkadot more appealing than ever.
At the time of writing, the Ethereum network handles about 15 transactions per second. By contrast, credit card payment systems process thousands of transactions per second. Not a good look for Ethereum 1.0.
What does Polkadot’s data show?
Looking at Polkadot, we see that its recent developer activity compares favorably to the cream of the crop — the top-ranking projects in the crypto universe.
A high developer score means that a project has an active developer community: a large number of contributors making regular updates. While projects may vary widely in technical architecture and goals, developer activity provides a common and easily understood metric by which projects can be compared, e.g. how many people are contributing to a project’s health and feature set?
Here’s a granular look at developer contributions. The key takeaway is that Polkadot shows consistent contributions (i.e. surges of activity), indicating a dedicated developer community that stays committed to the project over time.
What’s Flipside’s Take?
Metrics, like price, are reactive — they can tell you that a large number of buyers have become interested in purchasing tokens. A better standard to examine when assessing a project is: Does it have an active, engaged community of developers who are committed to making the project better by adding features and addressing vulnerabilities?
By that standard, Polkadot is an excellent example of a project that has attracted regular developer activity over time — and is now enjoying its moment in the limelight as a result.
The Flipside Crypto Asset Score Tracker provides institutional and sophisticated retail investors the ability to track over 500 cryptocurrencies’ fundamentals. FCAS Tracker is currently free to a select group of new users as it continues to develop the product. Visit Flipside here to gain access to Flipside Analytics.