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Polkadot Struggles with 0.09 TPS, But What Keeps Its Market Cap in the Billions?

Author: Content Editor
Polkadot, a blockchain network known for its innovation in connecting different blockchains, has a surprisingly low transaction volume, with only 0.09 transactions per second (tps) currently and an average of 0.1 tps over the last month. This raises doubts about the actual usage of the network despite its $6.4 billion market cap. The discrepancy between market price and network activity leads to questions about what drives Polkadot's value. One potential reason is that market capitalization may not always be the best indication of a blockchain's future possibilities. Speculators and investors may have placed high value on Polkadot's market cap. Additionally, Polkadot's governance mechanisms and scalability solutions make it a major player in the blockchain market, even if current usage statistics do not reflect this. The low transaction throughput could be attributed to Polkadot's focus on a heterogeneous multi-chain network and the possibility that most of the network's work is happening on parachains rather than the relay chain itself. Another possibility is that Polkadot is still in a state where its full capacity has not yet been discovered, and as more projects and decentralized applications are deployed on the network, transaction throughput may increase.

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