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The Polkadot (DOT) team is working to enhance interoperability between different blockchains. Currently, the project’s native token DOT is trading over 90% below the all-time high reached on Nov. 4, 2021, at the peak of the bull market.
A large-scale market crash often causes newcomers to panic and hastily sell off their assets. However, experienced traders regard such events as an opportunity to form a reliable medium- or long-term portfolio and purchase the coins they are interested in at a discount.
Let’s figure out how much you need to invest in Polkadot now to become a DOT millionaire during the next bull run.
What is Polkadot?
Polkadot is a project created by one of the founders of Ethereum, Gavin Wood, who wrote the Solidity programming language.
In early January 2016, Wood left Ethereum to work on his own project. As part of the initiative, the developer decided to find a way to increase blockchain interoperability, the main task of which is to “teach” projects to “communicate.”
Read more: What Is Polkadot (DOT)?
The project was launched in November 2018. Since then, the project developers have been continuously working to improve Polkadot. They launched the first phase of the main protocol in May 2020.
At the end of August 2020, the team conducted a DOT redenomination. As a result, the cryptocurrency was among the top 10 leaders in the market capitalization rating.
Polkadot’s native token performs several functions:
- Protocol management: Token owners gain control of the protocol. For example, DOT holders can determine the transaction fee structure.
- Protocol operation: DOT tokens are needed for the Polkadot protocol’s functioning. Tokens can be compared to the fuel that makes the project work.
- Rewards: Active network members receive rewards in DOT.
The asset has a market capitalization of $4.88 billion currently and ranks 14th in the rankings of cryptocurrencies based on market capitalization.
How Many Tokens Do You Need to Buy to Become a Millionaire?
To calculate the number of tokens you need to buy to become a millionaire when DOT returns to its all-time high, you can use the following formula:
Polkadot Quantity = Target Amount / Expected Future Price
Where:
- Target amount: $1 million
- Expected future price – all-time high $54.98
Thus, to see a round sum of $1 million in your account, you need to purchase 18,188 DOT. At the current price of $3.80, the coins would be worth approximately $69,114.
Read more: What Is Blockchain Interoperability?
However, it should be understood that the crypto market can be extremely volatile and subject to black swan events. The calculations provided are based solely on current data and assumptions. Always remember to adhere to risk and money management and only trade with money that you can afford to lose.