Token

Multichain

Polkadot

<ul>
 <li><em>The jump in fees came alongside a more than 2x increase in daily active users.</em></li>
 <li><em>DOT rose 14.65% over the past week and nearly 57% month-to-date.</em></li>
</ul>
<p>Multichain protocol&nbsp;<a href="https://ambcrypto.com/search/dot" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">Polkadot [DOT]</a> witnessed a sharp rise in on-chain activity in December.</p>
<p>According to AMBCrypto’s analysis of Token Terminal data, weekly transaction fees on the relay chain reached an all-time high (ATH) of $2.6 million between the 18th to the 25th of December.</p>
<p>This represented a whopping 1218% jump from the total fees collected the week before.</p>
<p>For the curious, the relay chain acts as the governance layer of the network and secures, governs, and connects several parachains.</p>
<div id="attachment_361005" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Polkadot-network.jpg" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-361005" decoding="async" class="size-full wp-image-361005" src="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Polkadot-network.jpg" alt="" width="1013" height="487" srcset="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Polkadot-network.jpg 1013w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Polkadot-network-300x144.jpg 300w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Polkadot-network-768x369.jpg 768w" sizes="(max-width: 1013px) 100vw, 1013px"></a>
 <p id="caption-attachment-361005" class="wp-caption-text">Source: Token Terminal</p>
</div>
<p>The jump in fees came alongside a more than 2x increase in daily active users. An average of 15.3k users hopped onto the network daily during the aforementioned period.</p>
<h4>Inscriptions effect?</h4>
<p>Like other blockchains, the spurt was driven by heavy demand for inscriptions, according to a well-known crypto researcher and pseudonym <a href="https://x.com/Flowslikeosmo/status/1740145567765045611?s=20" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">Emperor Osmo</a> on X (formerly Twitter).</p>
<p>Similar to&nbsp;<a href="https://ambcrypto.com/search/ordinals" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">Bitcoin Ordinals</a>, Inscriptions work by embedding images or other data directly on the chain. They can be used to create unique digital assets like non-fungible tokens (NFTs) and even decentralized applications (dApps).</p>
<p>While Bitcoin was the first to witness this frenzy, the unique concept was gradually picked up by other L1s and L2s as well. Inscriptions have been the <a href="https://ambcrypto.com/how-inscriptions-has-impacted-transactions-across-the-board/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">primary driver</a> in boosting transactions and fees across several networks in December.</p>
<h4>DOT rallies 57% in December</h4>
<p>As is well known, a portion of the total fees earned on the network goes to DOT tokenholders who govern the protocol. Logically, this means that a spike in fees could drive up demand for DOT. This is what exactly happened.</p>
<p>DOT rose 14.65% over the past week and nearly 57% since the beginning of December, AMBCrypto spotted using <a href="https://coinmarketcap.com/currencies/polkadot-new/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">CoinMarketCap’s</a> data.</p>
<p style="text-align: center;">Realistic or not, here’s&nbsp;<a href="https://ambcrypto.com/calculator/marketcap" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">DOT’s market cap in BTC’s terms</a></p>
<p style="text-align: left;">The rally generated a lot of social traction for the cryptocurrency. As per AMBCrypto’s analysis of CoinMarketCap’s data, the coin’s mentions on top crypto-focused social media channels increased significantly.</p>
<div id="attachment_361035" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-14.37.10-28-Dec-2023.png" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-361035" decoding="async" class="size-full wp-image-361035" src="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-14.37.10-28-Dec-2023.png" alt="" width="3840" height="1300" srcset="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-14.37.10-28-Dec-2023.png 2560w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-14.37.10-28-Dec-2023-300x102.png 300w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-14.37.10-28-Dec-2023-1024x347.png 1024w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-14.37.10-28-Dec-2023-768x260.png 768w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-14.37.10-28-Dec-2023-1536x520.png 1536w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-14.37.10-28-Dec-2023-2048x693.png 2048w" sizes="(max-width: 3840px) 100vw, 3840px"></a>
 <p id="caption-attachment-361035" class="wp-caption-text">Source: Santiment</p>
</div>
<p>The uptrend also caught the eye of speculative traders. DOT’s Open Interest (OI) jumped 26% over the last week, signaling an influx of fresh capital into its derivatives market.</p>

Polkadot network mints money as Inscriptions drive demand

AMBCrypto

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