Coin Bureau Compares Polkadot (DOT) And Cosmos (ATOM)
Popular YouTube crypto channel Coin Bureau compares two Ethereum (ETH) rivals to decide which one is leading the race.
In a recent video update, Coin Bureau’s host and crypto analyst Guy shared with the channel’s 2 million subscribers where he sees open-source multichain protocol Polkadot (DOT) and ecosystem of blockchains Cosmos (ATOM) heading.
Polkadot (DOT)
Few months ago, Coin Bureau looked in detail into DOT’s parachain auctions, a selection process, which determines the project-specific blockchains that will be integrated into the Polkadot network.
The analyst now updates:
“Demand driver for DOT is coming from use cases on Polkadot’s parachains, notably Acala, which recently announced a massive incentive fund for its DeFi (decentralized finance) platform which leverages DOT.
A convenient side effect of Polkadot’s parachain slot auctions is that almost 15% of DOT’s circulating supply has been locked for two years, and when you add that to DOT’s staked supply of around 55%, it means only around 30% of DOT’s supply is readily available for trading.
This should translate to more price volatility for DOT when demand comes back around, but DOT’s massive market cap means it’ll have a hard time going higher than 3x in the short-to-medium term, especially with all the resistance that’s been built up around the $30 level.”
At time of writing, DOT trades at $14.69, down 2.48% on the daily chart.
Cosmos (ATOM)
Coin Bureau then moves on to look into Cosmos. According to Guy, ATOM should witness healthy growth, unless the wider crypto market crashes.
“Many projects in Cosmos’s ecosystem aren’t widely supported by centralized exchanges or even resist being listed on centralized exchanges. This only further increases the demand for ATOM as the bridge currency to these new chains.
Another advantage that ATOM has is a medium-sized market cap. This means that it takes less money to push up ATOM’s price in percentage terms. To put things into perspective, if ATOM saw the same level of investment as DOT, it would result in a 3x from its current price.
I reckon this is a realistic short-to-medium term expectation for ATOM, assuming retail interest returns. If that does indeed happen and at the rate that Cosmos ecosystem is growing, I think a 5x move is a possibility.
I will stress that this all assumes the crypto market will continue its rally, something which isn’t in any way guaranteed.”
At the time of writing, ATOM is trading at $17.66, down 1.68% on the daily chart.
The Winner
Putting the two head to head to determine which altcoin is the winner, is not an easy call, the analyst notes, as they are very similar.
“It’s uncanny just how similar these two crypto projects are. The only real difference is the purposes their blockchains serve, and it looks like they’re about to become similar on that side too.
That’s because Cosmos will be introducing inter-chain security later this year, which will allow smaller Cosmos cryptocurrencies to leverage its blockchain for additional security in a similar way that parachains do on Polkadot.”
DOT comes out on top based on tokenomics, says Guy
“Unfortunately, ATOM’s tokenomics don’t translate to terrific economics. This is where DOT reigns supreme because even though DOT isn’t used to pay for fees on all Polkadot’s parachains. It has more than enough institutional interest to make up for it, never mind all the secondary utilities on parachains.
As for ATOM, its primary demand drivers are mostly temporary as centralized exchanges continue adding popular Cosmos projects. ATOM’s use as a bridge currency will decline especially since it hasn’t managed to turn itself into the interoperability hub it was hoping to become.”
Tokenomics – a word derived from “token” and “economics” – is a catch-all for the elements that make a particular cryptocurrency valuable and interesting to investors. That includes everything from a token’s supply and how it’s issued to things like what utility it has.
