Blockchain analytics platform Messari has published a detailed report on Polkadot’s performance in Q2, 2022, analyzing different aspects of the protocol, including market valuation, network usage, developer activity, parachains, and ecosystem challenges.
Polkadot’s Valuation Dropped 66% in Q2
The paper, dubbed the “State of Polkadot,” revealed that the blockchain project’s native crypto asset shredded about 66% of its market cap in three months.
Polkadot closed the last quarter with a $7.9 billion valuation, down from the $15 billion recorded in Q1. This also represents an 86% drop from its all-time high (ATH) market cap of $49 billion in November 2021.
The report further noted that despite the massive slump in valuation, Polkadot has continued to see favorable developments in some aspects of its ecosystem, especially in network usage and developer activity.
Strong Network Usage
Messari pointed out that Polkadot’s network usage remained strong in Q2 2022 despite the massive correction in the price of DOT, Polkadot’s native currency.
While user accounts remained nearly consistent, the number of active monthly ones on the network grew by more than 30% in the last quarter. The project recorded 145,000 monthly users in Q2, with 77,000 active ones and 68,000 new users compared to the 149,000 monthly and 56,000 active in Q1.
The consistency in user count is further revealed in the value of DOT token transfers made during both quarters. In Q2, Polkadot had an average of 293 million DOT transfers per month, marginally higher than the 288 million DOT transfers in the previous quarter.
Thus, in the second quarter of 2022 alone, Polkadot had an estimated 435,000 users with 878 million DOT tokens transferred.
Developer Activity Surges
In addition to positive network usage, the report revealed that Polkadot’s developer activity was impressive during the second quarter of 2022.
In 2021, the protocol had the second largest developer community, and in Q2 2022, developer activity on the network stayed consistent, with an average of 11,000 dev events per month. According to Messari, this metric on Polkadot remains one of the strongest in the crypto industry.
Last month, Polkadot’s creator Gavin Wood disclosed a proposal for the next generation of governance for the DOT ecosystem.
Polkadot’s Challenges
The report also outlined some challenges that rocked the Polkadot network in Q2. Although the project recorded strong network usage and developer activity during the market crash, other metrics were significantly down from their all-time highs.
Messari suggested that “developing new functionality and use cases” may help resuscitate user interest and more activities on Polkadot, especially now that the network has enabled XCM for cross-chain asset transfer.
Furthermore, the report pointed out that Polkadot must continue to scale and connect more parachains to XCM while maintaining its developer activity dominance.