Why did the price of DOT fall?
Polkadot (DOT) dropped 3.5% in the last 24 hours to $3.82, underperforming the overall crypto market, which fell by 1%. This decline is driven by doubts about a proposed DOT-backed stablecoin, a technical price rejection, and weakness across other altcoins.
- Stablecoin Proposal Uncertainty: The community is hesitant about the pUSD stablecoin due to Acala’s previous failure.
- Technical Setback: DOT failed to break above the $4.10 resistance level, signaling bearish momentum.
- Market Shift to Bitcoin: Investors are moving away from altcoins as Bitcoin gains strength.
Deep Dive
1. Stablecoin Proposal Sparks Doubts (Negative Impact)
Overview: Polkadot’s community is voting on RFC-155, a plan to launch pUSD, a stablecoin backed by DOT and built on Acala’s Honzon protocol. Although 74.6% of votes support it, the proposal needs 79.7% to pass. Critics remain concerned because Acala’s aUSD stablecoin collapsed in 2022, losing its peg and causing a $3.8 billion loss.
What this means: The connection to Acala raises worries about security and governance. If the proposal fails, DOT could miss out on increased liquidity. If it passes, distrust might slow adoption.
What to watch: Voting ends in about three weeks. A rejection or low voter turnout could lead to more selling pressure.
2. Technical Resistance Holds (Negative Impact)
Overview: DOT tried but failed to break above the $4.10 resistance level, an important technical point. Indicators like the MACD (-0.0437) and RSI (44.6) suggest bearish momentum, and the price is below its 7-day moving average ($3.94).
What this means: Traders are selling near resistance, worried that DOT might retest its recent low around $3.62. The $3.96 level now acts as resistance, adding to downward pressure.
Key level to watch: If DOT closes below $3.75, it could accelerate the drop toward $3.60.
3. Altcoin Weakness as Bitcoin Gains (Mixed Impact)
Overview: Bitcoin’s market dominance rose to 58.37% (up 0.6% in 24 hours), while the Altcoin Season Index dropped 15% this week. DOT’s 24-hour trading volume fell 31% to $199 million, showing less speculative interest.
What this means: Investors are shifting funds toward Bitcoin amid concerns about a possible U.S. government shutdown by October 1. Without strong upcoming events, Polkadot is lagging behind major altcoins like BNB.
Conclusion
DOT’s recent drop is due to specific project risks (uncertainty around pUSD), technical setbacks, and a cautious market favoring Bitcoin. While the stablecoin could boost DOT’s long-term use, short-term sentiment depends on resolving governance issues and reclaiming the $3.96 level.
Key watch: Will DOT hold support at $3.75, or will news like the 21Shares DOT ETF delay push prices lower?
What could affect the price of DOT?
Polkadot’s price is currently influenced by a mix of protocol upgrades, plans for a new stablecoin, and upcoming regulatory decisions.
- pUSD Stablecoin Vote – With 74.6% community support, the new stablecoin could increase Polkadot’s usefulness but carries risks tied to Acala’s past issues.
- DOT Supply Cap – A hard limit of 2.1 billion DOT tokens by 2040 aims to create scarcity, but some token holders might sell off their stakes.
- ETF Prospects – The SEC’s November 2025 deadline for approving 21Shares’ DOT ETF could bring more institutional investors into the market.
Deep Dive
1. pUSD Stablecoin Proposal (Mixed Impact)
Overview:
Polkadot’s community is voting on a proposal (RFC-155) to launch pUSD, a stablecoin backed by DOT tokens and managed through Acala’s Honzon protocol. So far, 74.6% of the community supports it, but it hasn’t reached the 79.7% needed to pass. Some critics are concerned because Acala experienced a major exploit in 2022 and want Polkadot’s Technical Fellowship to oversee the project.
What this means:
If approved, pUSD could reduce Polkadot’s dependence on existing stablecoins like USDT and USDC, which currently dominate its $74 million stablecoin market, and improve liquidity for decentralized finance (DeFi) applications. However, fears of a collapse similar to Terra’s stablecoin crash and Acala’s past problems could slow adoption even if the vote passes.
2. Tokenomics Overhaul (Bullish Impact)
Overview:
Referendum 1710, which passed with 81% approval, sets a hard cap on DOT’s total supply at 2.1 billion tokens by 2040. This replaces the previous system that allowed unlimited minting of 120 million DOT per year. The new plan reduces token emissions every two years, aiming for 1.91 billion DOT by 2040 instead of 3.4 billion under the old system.
What this means:
Limiting the supply could increase DOT’s value over time by creating scarcity, similar to Bitcoin’s approach. However, staking rewards may decrease in the short term, which might lead some validators to sell their tokens. Currently, DOT’s inflation rate is 7.4%, expected to drop to 3.3% by March 2026 (CoinJournal).
3. ETF & Regulatory Catalysts (Bullish/Bearish)
Overview:
The U.S. Securities and Exchange Commission (SEC) has postponed the decision on 21Shares’ Polkadot ETF until November 8, 2025, while approving general crypto ETF guidelines on September 18. Analysts estimate a 90% chance the ETF will be approved, which could bring significant institutional investment similar to what happened with Bitcoin ETFs.
What this means:
If approved, the ETF could attract large-scale investors to DOT, potentially boosting its price. However, delays or rejection could keep DOT underperforming. Additionally, a possible U.S. government shutdown by October 1 might delay regulatory decisions further (Cryptonews).
Conclusion
Polkadot’s price will depend on how well it balances limited token supply with concerns over stablecoin trust and regulatory developments. The upcoming DOT ETF decision in November and the outcome of the pUSD stablecoin vote are key moments to watch.
Will the story of DOT’s capped supply overcome its reputation as a “deadchain”? Keep an eye on ETF news and governance updates around pUSD.
What are people saying about DOT?
Polkadot traders are divided between hopes for a price breakout and fears of a breakdown, all eyes on the key $3.80 support level. Here’s what’s happening:
- Breakout optimism as DOT holds near $3.80 with positive chart signals
- Ecosystem improvements like Polkadot 2.0 driving long-term confidence
- Bearish caution warning of risks if the $3.80 support fails
Deep Dive
1. @ThomasReidBtc: $DOT Breakout Watch 🚀 bullish
"After holding steady near $3.80, $DOT is aiming for $4.10–$4.25. Growing investor interest and strong fundamentals suggest good upside potential."
– @ThomasReidBtc (12.3K followers · 38K impressions · Aug 31, 2025, 05:49 UTC)
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What this means: Traders are optimistic that DOT will break above its recent two-week trading range, supported by ongoing improvements in the Polkadot ecosystem.
2. CoinDesk Research: Support Zone Stress Test bearish
"DOT is facing selling pressure near $3.81. If it falls below $3.80, it could drop further, although a short-term bounce to $3.88 is possible."
– CoinDesk Analysis (Jul 30, 2025, 11:05 UTC)
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What this means: There’s short-term downward pressure as sellers defend the $3.80–$3.88 range, but some traders may try to profit from quick price moves within this zone.
3. Polkadot 2.0 Coverage: JAM Upgrade Hype mixed
"Polkadot 2.0’s JAM upgrade, expected in Q4 2025, promises faster speeds (1 million transactions per second) and compatibility with Ethereum apps. However, developer activity hasn’t yet reached 2024 levels."
– Ecosystem Report (Aug 12, 2025, 12:53 UTC)
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What this means: There’s cautious optimism about the upgrade’s potential to improve Polkadot’s usefulness and attract more developers, but concerns remain about how quickly adoption will grow.
Conclusion
The outlook for Polkadot is mixed. Technical traders are focused on whether the $3.80 support holds, while developers and enthusiasts are hopeful about the upcoming upgrades later in 2025. In the short term, keeping above $3.80 is crucial for positive momentum. The success of the JAM upgrade in attracting builders could shape DOT’s path in 2026. Watch the $3.60–$3.80 range closely—a drop below this could weaken bullish hopes, while holding steady might push prices toward August’s high of $4.25.
What is the latest news about DOT?
Polkadot is working to balance regulatory challenges with new innovations in its ecosystem. Here’s the latest update:
- Stablecoin Proposal Vote (September 29, 2025) – The community is voting on pUSD, a stablecoin backed by DOT tokens.
- SEC Updates ETF Process (September 29, 2025) – Polkadot ETF applications are facing changes in procedure, not outright rejection.
In-Depth Look
1. Stablecoin Proposal Vote (September 29, 2025)
What’s Happening:
The Polkadot community is voting on Referendum 1710, which would create pUSD, a stablecoin fully backed by DOT tokens. This proposal was put forward by Bryan Chen, CTO of Acala, and uses the Honzon protocol. (This protocol was involved in a previous issue with Acala’s aUSD stablecoin in 2022.) So far, 74.6% of voters (representing 1.4 million DOT) support the idea, but it hasn’t reached the required 79.7% approval. Some community members are concerned because of Acala’s past problems, while supporters believe pUSD could reduce Polkadot’s dependence on other stablecoins like USDT and USDC, which currently hold about $74 million on the Polkadot network.
Why It Matters:
The vote shows mixed feelings. If approved, pUSD could increase liquidity (the ease of buying and selling) in decentralized finance (DeFi) on Polkadot and strengthen the network’s validators (those who help secure the blockchain). However, rushing the launch could risk repeating past security issues, which might hurt Polkadot’s reputation. (CoinJournal)
2. SEC Updates ETF Process (September 29, 2025)
What’s Happening:
The U.S. Securities and Exchange Commission (SEC) withdrew certain filings for Polkadot and other altcoin ETFs (exchange-traded funds) to align with new listing rules approved on September 18. These new rules make it easier for exchanges to list crypto ETFs if they meet specific requirements like liquidity and secure custody. The 21Shares Polkadot ETF is still under review, with experts estimating a 90% chance it will be approved by November 2025.
Why It Matters:
This is a neutral to positive development. Although there are still delays, the clearer rules provide a better path forward for ETF approval. If approved, ETFs could bring more institutional investors into Polkadot. However, Polkadot must first meet the SEC’s requirement of having six months of futures trading before approval. (Cryptonews)
Conclusion
Polkadot is carefully navigating between regulatory requirements and its goal of maintaining a decentralized ecosystem. The stablecoin vote and ETF approval process show this balancing act between attracting big investors and supporting community-driven governance. The key question remains: Will Polkadot’s technical improvements move fast enough to overcome regulatory delays and regain the momentum it had in 2021?
What is expected in the development of DOT?
Polkadot’s roadmap is focused on improving scalability, enabling cross-chain compatibility, and growing its ecosystem through these key milestones:
- Full EVM Compatibility (Dec 2025) – Allow Ethereum-based decentralized apps (dApps) to run directly on Polkadot.
- JAM Upgrade Completion (Late 2025) – Replace the current Relay Chain with a more scalable, parallel chain system.
- DOT Hard Cap Implementation (Mar 2026) – Set a fixed maximum supply of DOT to reduce inflation, similar to Bitcoin’s scarcity model.
- Decentralized Stablecoin Launch (TBD) – Introduce a community-backed stablecoin supported by DOT.
Deep Dive
1. Full EVM Compatibility (Dec 2025)
Overview: Polkadot plans to fully support the Ethereum Virtual Machine (EVM), which is the technology that runs Ethereum’s smart contracts. This upgrade (Cryptofront News) will let developers easily move their Ethereum-based applications to Polkadot, benefiting from its faster transaction speeds and shared security across its network.
What this means: This is positive for DOT because it makes Polkadot more attractive to Ethereum developers, lowering the technical barriers to building on Polkadot. However, Polkadot will face competition from other blockchains that also support EVM, like Avalanche.
2. JAM Upgrade Completion (Late 2025)
Overview: The JAM (Join-Accumulate Machine) upgrade (CoinMarketCap) will replace Polkadot’s current Relay Chain with a new system made up of multiple parallel chains. This change aims to eliminate transaction fees (gas fees) and increase the network’s capacity to handle more transactions at once. It also incorporates some technology from Ethereum to attract more developers.
What this means: This upgrade could improve Polkadot’s scalability, which is good news, but its success depends on how many developers adopt the new system. There is a 10 million DOT incentive pool to encourage participation, but delays could affect community confidence.
3. DOT Hard Cap Implementation (Mar 2026)
Overview: Following Referendum #1710, Polkadot will set a maximum supply of 2.1 billion DOT coins (Yahoo Finance). Starting in March 2026, the yearly issuance of new DOT will be cut by over half (52.6%), similar to Bitcoin’s halving events, to help control inflation.
What this means: This is generally positive for DOT in the long run because limiting supply can increase scarcity and value. However, in the short term, holders who stake DOT may see lower rewards, which could cause some price fluctuations.
4. Decentralized Stablecoin Launch (TBD)
Overview: Polkadot is working on launching a decentralized stablecoin backed by DOT (CobakOfficial). This stablecoin aims to compete with popular options like USDT and USDC. The exact design and launch date are still being discussed within the community.
What this means: If successful, this stablecoin could increase liquidity in decentralized finance (DeFi) on Polkadot and boost the use of DOT. However, it faces challenges such as regulatory scrutiny and competition from established stablecoins.
Conclusion
Polkadot’s roadmap combines important technical upgrades (like EVM compatibility and the JAM upgrade) with economic changes (like the DOT hard cap) to strengthen its role as a scalable, multi-chain platform. The planned stablecoin could further increase DOT’s use in DeFi, but there are risks in execution. Additionally, with the SEC’s decision on a Polkadot ETF still pending, institutional interest could play a big role in shaping DOT’s future in 2026.
What updates are there in the DOT code base?
Polkadot’s software received important updates in the third quarter of 2025, focusing on better tools for developers and smoother communication between different blockchains.
- Raw Query API & BitSequence Improvements (July 2025) – Made it easier to access and manage blockchain data at a detailed level.
- Smoldot Finality Fix Collaboration (August 2025) – Fixed bugs that caused connection issues for lightweight clients.
- Developer Activity Surge (July 2025) – A 20% increase in code contributions shows growing developer interest.
Deep Dive
1. Raw Query API & BitSequence Improvements (July 2025)
Overview: The Polkadot-API version 1.15.0 introduced a new feature called rawQuery, which allows developers to access specific storage data directly. It also improved how BitSequence data is handled.
Before, some data was stored in a way that was hard to interpret, like long strings of bytes. Now, BitSequences are shown as arrays of individual bits (0s and 1s), making it easier for developers to work with this data. This helps build applications like governance tools or NFT platforms more efficiently.
Why it matters: These changes simplify complex data tasks, saving developers time and effort. This flexibility encourages more developers to build unique applications on Polkadot.
2. Smoldot Finality Fix Collaboration (August 2025)
Overview: Polkadot’s team found and fixed a critical bug in Smoldot, the lightweight client software used to connect to the Polkadot network.
The bug caused light clients to disconnect when the group of validators (the network’s decision-makers) changed, forcing users to resynchronize. Working closely with the Smoldot team, developers fixed this issue to ensure stable and reliable connections for wallets and blockchain explorers.
Why it matters: Fixing this rare but disruptive bug improves the overall reliability of Polkadot’s infrastructure, which is important for services that need constant network access.
3. Developer Activity Surge (July 2025)
Overview: In July 2025, Polkadot saw a 20% increase in code contributions on GitHub compared to the previous month. This growth was driven by work on Polkadot 2.0 features like Elastic Scaling and preparations for the JAM protocol.
Developers contributed to core improvements, compatibility with Ethereum’s virtual machine (EVM), and tools for parachains (independent blockchains connected to Polkadot). The number of active developers also rose by 5.7%, reversing a previous decline.
Why it matters: More developer activity usually means a healthier and more innovative ecosystem, which bodes well for upcoming features like smart contracts.
Conclusion
Polkadot’s recent updates focus on making the platform more flexible, reliable, and developer-friendly—key factors as it competes to host the next generation of decentralized applications. With improvements in data access, client stability, and a growing developer community, Polkadot is well-positioned for wider adoption. The big question is whether these technical upgrades will lead to significant growth as Polkadot 2.0 continues to develop.