A partnership between ZodiaCustody and Paritytech has enabled institutional investors to venture into liquid staking on the Polkadot network.
Though the reward rate has been declining, the amount of staked DOT has continued to rise, pointing to an optimistic view from investors.

The Polkadot network is enjoying institutional interest owing to its liquid staking offer. In recent years, decentralized finance (DeFi) has played a significant role in the growth of top blockchain networks. Polkadot through a partnership between ZodiaCustody and Paritytech is venturing into the space and offering staking services.

This allows institutional investors to stake their DOT tokens for rewards. Investors are able to passively earn more DOT tokens and help secure the Polkadot network. Beyond staking, the partnership will enable custody services to support the Polkadot ecosystem.

1/
A new long-term strategic partnership between @ZodiaCustody and @paritytech will enable institutional access – including staking – to the Polkadot ecosystem! pic.twitter.com/BO8hocrI73

— Polkadot (@Polkadot) September 13, 2023

Institutional investors are sought after by most projects as they bring healthy stability to the network. For starters, unlike retail investors, they are not easily swayed by short-term price movements. Additionally, institutional investors move large volumes, dictating the short and long-term sentiments of the network. Furthermore, they play a significant role in the growth of the Total Value Locked (TVL) in the protocol.

In the case of Polkadot, the amount of staked DOT has been on a steady rise. However, the reward rates offered by the network have been on a decline. The falling rates are a concern for investors already staking and raise a question about its sustainability as well as its ability to attract new investors.

Nevertheless, the entry of institutional investors as stakers is a positive development that will promote the adoption of the network and better secure it. Additionally, this will drive demand for the DOT token, possibly driving the token’s price higher. A post shared by Polkadot on X (Twitter) notes;

The partnership will help financial institutions stake DOT, enabling them to participate in a process that provides security and decentralization in the Polkadot network – and provide custody services for the ecosystem.

Polkadot (DOT) Price Expectations

Polkadot (DOT) has been struggling for the last two years, dropping by more than 90 percent from its all-time high of $54.98. At the time of press, DOT is exchanging for $4.08 after a nearly 2 percent rise in the last 24 hours. Glassnode cofounder going by username @Negentropic_ on X has been sharing insights into DOT. The analyst has warned that DOT and ADA could be a risky play in the short term.

The expert advises investors to look for alts that have outperformed Bitcoin so as to short them as Bitcoin nears resistance. The analyst noted, ” Look for alts that outperformed and short as BTC nears resistance. ⁃ Long alts hit hard when BTC nears support (e.g., Cardano, Polkadot).”

Short-term altcoin play with some risk

Many alts pump and retrace as Bitcoin struggles to break out (e.g., Solana).

⁃ Look for alts that outperformed and short as BTC nears resistance.
⁃ Long alts hit hard when BTC nears support (e.g., Cardano, Polkadot).

If they spike now,… pic.twitter.com/99PVAiU4Lu

— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Negentropic_) September 13, 2023

The two coins are backed by notable projects, and their long-term prospects are not in doubt. However, showing no bullish signs, investors should be wary of their short-term performance.

---

Filed under: Bitcoin - @ September 15, 2023 10:16 am