New Delhi (CoinChapter.com) — Venture capital firm Master Ventures launched a $30 million fund for crypto-based projects seeking a parachain slot on Polkadot on Wednesday. The “first-of-its-kind fund,” dubbed as Master Ventures Polkadot VC Fund, would also support projects applying for parachain slots on the Kusama ecosystem.
The news bolstered demand for Polkadot’s native token DOT, which was already correcting upward following May’s price crash. The DOT/USD exchange rate rose by more than 50% week-to-date to reach as high as $29.21, including a 12.76 percent climb during the Asia-Pacific and European session Wednesday.
Polkadot and its canary network Kusama plan to launch more than 50 parachains by 2022. Parachains are layer-1 blockchains that run on Polkadot as well as Kusama.
Interested parties will have to bid in a candle auction for these parachains. To increase community support, competing projects will issue their native tokens in exchange for a DOT crowd loan. The DOT/KSM lenders get the project’s native tokens airdropped in their wallets. Master Venture will fund the parachain bids and also invest directly into promising projects.
Polkadot Promising Bright Future?
Both Polka and Kasuma have recovered strongly since the market crash.
For Polkadot, the price has stayed above the 50-4H moving average, indicating an uptrend. However, when considering the 200-day MA, the price has stayed below but is steadily rising upwards.
Since May 23, DOT has undergone a 108% price rally — from $13.70 to $28.52. Per the ascending channel pattern shown in the chart below, the next DOT price milestone appears at $31. Meanwhile, during the uptrend, RSI for DOT has stayed between a healthy 50-70 mark.
Kusama is Pokadot’s canary network. A canary network is a sandbox where developers can deploy their products. Kusama enables testing and experimentation of applications before deploying on the main blockchain. It acts as a security buffer for the Polkadot ecosystem. The native token of Kusama is ‘Kusama’.
This token as well is on an uptrend. Its prices have stayed above 50-Day and 200-Day moving average for the last 5 days. Its RSI also holds strong in the 40-70 range. KSM prices have risen by 146%, from $199.22 to $490.01, since May 23. At present, the token trades at $454.
What Lies Ahead
Altcoins led the market recovery after the May 19 crash. The move by Market Ventures will invite more De-Fi apps and NFTs to the Polkadot chain. As a result, the number of transactions for both DOT and KSM could increase, strengthening their position.
News about the VC fund has fueled positive speculations from analysts and traders alike. Bitcoin Suisse, a crypto finance service provider, forecasts more projects on the Polkadot ecosystem.
As of now, the market stays positive towards Polkadot, fueling the bullish trend it is currently enjoying.