Polkadot has been called the “Ethereum killer” because it is in prime position to take over the altcoin space currently occupied by Ethereum, which is the second-largest cryptocurrency by market cap and the one true altcoin to Bitcoin.
According to Forbes, the “little-known Swiss-born blockchain of blockchains has steamrolled over Ethereum in the last few months in terms of gains, up over 88% to Ethereum’s 50%”. Polkadot is now the sixth-largest altcoin by market cap.
This is due to Polkadot’s incredible scalability potential and interoperability. The blockchain technology is built to connect private and consortium chains, public and permissionless networks, oracles and future technologies that have not yet been created.
What is Polkadot (DOT)?
Polkadot (DOT) is a scalable, interoperable and secure blockchain network that allows any type of data across any type of blockchain. In other words, it allows arbitrary data and not just tokens to be transferred across blockchains.
Polkadot is a true multi-chain application environment where things like cross-chain registries and cross-chain computation are possible. The cryptocurrency has the same ambitions as Ethereum; to be the major platform for smart contracts and the deployment of dApps.
Launched in May 2025 as a Proof of Authority (PoA) network, Polkadot was founded by the Web3 Foundation in Switzerland. It was created by ex-Ethereum CTO Gavin Wood, Robert Habermeier and Peter Czaban.
The development of Polkadot and distribution of its native token, DOT, is overseen by the Web3 Foundation. Most of the people using Polkadot are developers but investors have also taken a keen interest in this emerging Ethereum challenger.
Is Polkadot (DOT) a good investment in 2025?
Yes, Polkadot’s native coin DOT is a good altcoin to buy in 2025. DOT should be a successful long-term investment considering how well it’s done in only one year since it was launched and it’s potential as a very usable, functional coin with innovative blockchain technology in Polkadot’s future.
The market expects the DOT price will rise to near $50 by the end of 2025. If Polkadot’s innovative technology blockchain intrigues you and you’re interested in investing in DOT, now is the time to buy.
Polkadot is certainly a better investment than some of the newly-introduced altcoins on the market. This is largely based on the ability of parachains to issue their tokens, which is something that you find in Ethereum protocols.
Keep reading our Polkadot review for a better understanding of its strengths and how it’s positioned to challenge Ethereum and other smart contract platforms for lead position in the altcoin market.
What makes Polkadot unique?
Polkadot can transfer data across public, open and permissionless blockchains as well as private, closed and permissioned blockchains. This makes it possible for developers to build applications that get permissioned data from a private blockchain and use it on a public blockchain.
Example
A school’s private, permissioned academic records could send a proof to a degree-verification smart contract on a public chain.
This makes Polkadot a true interoperable system. Interoperability is the basic ability of computer systems to connect and communicate with one another readily. This is crucial in a modern economy for the exchange of information between applications, databases and other computer systems.
Is Polkadot a good investment in 2025?
Yes, Polkadot is a good cryptocurrency to trade in 2025. DOT is one of the few new altcoins where the big hype around a native coin is properly justified. Polkadot is one of the most well-funded blockchain projects in history and the market is bullish about its future as it’s proving to be a real challenger crypto-asset.
Launched in May 2025, DOT has become the sixth-largest cryptocurrency by market capitalisation in less than a year of existence. According to Coinmarketcap.com, Polkadot has a valuation of $33 billion and a circulating supply of 920.8 million. This puts DOT just behind Cardano’s ADA and just ahead of Ripple’s XRP.
Is Polkadot risky?
No, Polkadot is not risky itself as a technology innovator. The only risk is trading in DOT which is a cryptocurrency. Cryptocurrency is notoriously risky as with forex in general, due to the fact that cryptocurrency trading is highly leveraged and the market is extremely volatile.
Web3 Foundation launched Polkadot in 2025 and in just over a year, the project has proven to be very successful in its goal to solve interoperability, governance and forking challenges as well as many other software problems that have hampered the scability of other blockchains.
The Web3 Foundation has managed to achieve true interoperability through Polkadot. The project enables cross-blockchain transfers of any type of data or asset, not just tokens. Polkadot gives you the ability to interoperate with a wide range of blockchains on the network.
Polkadot’s interoperability extends beyond allowing assets to be swapped cross-chain. It enables data to be swapped and supports cross-chain computation. Likewise, the Polkadot network offers high scability because it uses a shared set of validators to secure transactions on multiple blockchains.
Who are the founders of Polkadot?
Polkadot was founded by Gavin Wood, the co-founder of Ethereum, alongside co-founders Robert Habermeier and Peter Czaban.
Gavin Wood
- Invented Solidity which is the language used by developers to write decentralised applications (dApps) on Ethereum
- Was Ethereum Foundation’s first Chief Technology Officer (CTO)
- Previously a research scientist at Microsoft
- Founded Parity Technologies in 2015 with Jutta Steiner, created to implement projects wishing to build on Ethereum; worked on software essential to powering Ethereum and now maintains Substrate, a software development framework primarily used by Polkadot developers to create parachains
- President of the Web3 Foundation
Robert Habermeier
- Thiel Fellow and co-founder of Polkadot
- Has a research and development background in blockchains, distributed systems and cryptography
- Longtime member of the Rust community, he has focused on leveraging the language’s features to build highly parallel and performant solutions
Peter Czaban
- Technology Director of the Web3 Foundation where he works on supporting the development of the next generation of distributed technologies
- Obtained his Masters of Engineering degree at the University of Oxford, reading Engineering Science where he focused on Bayesian Machine Learning
What is the Web3 Foundation?
The Web3 Foundation was created to nurture and steward technologies and applications in the fields of decentralised web software protocols, particularly those which use modern cryptographic methods to safeguard decentralisation to the benefit and for the stability of the Web3 ecosystem.
The Web3 Foundation is also the non-profit organisation that conducted Polkadot’s token sales. The Foundation received 30 percent of the funds from the token offerings, and oversees the allocation of those funds for furthering the development of Polkadot.
How much does DOT cost?
The DOT token was launched in August 2025 at a price of $2.70. Its price hovered between $3 and $5 for the rest of the year and then suddenly climbed to the $8 level at the end of December 2025, at the same time other cryptocurrencies rallied.
DOT’s value reached an all-time high of $42.25 in February 2025, gaining 353 percent from the start of the year. DOT settled down to more realistic levels, trading between $30 and $37 at the end of the first quarter.
The big question is whether DOT will break through the $50 price ceiling in 2025 and how high the price will go in the next five years.
How many DOT tokens are in circulation?
Circulating supply: 922 982 400 DOT
Maximum supply: 1 058 990 476 DOT
How does Polkadot work?
Polkadot is designed to operate two types of blockchains:
- Main network called a relay chain where transactions are permanent
The Relay Chain is the central chain of Polkadot. It is composed of a relatively small number of transaction types that include ways to interact with the governance mechanism, parachain auctions and participating in NPoS.
- User-created networks called parachains
A parachain is an application-specific data structure that is globally coherent and validated by the validators of the Polkadot Relay Chain. It’s common for a parachain to take the form of a blockchain but there is no specific need for them to be actual blockchains.
How is Polkadot different to other software platforms
Polkadot is built to connect private and consortium chains, public and permissionless networks, oracles and future technologies that are yet to be created. It’s designed to facilitate an Internet where independent blockchains can exchange information and transactions in a trustless way via the Polkadot relay chain.
Basically, Polkadot makes it a lot easier for developers to create and connect decentralised apps (dApps), services and institutions. What makes Polkadot different is platform empowers developers and innovators to build better crypto solutions through parachains.
Parachains can be customised for any number of uses and feed into the relay chain. This means a parachain transaction can benefit from the same peer-to-peer network security as the relay chain. Transactions can be kept secure and accurate using only the computing resources required to run the relay chain.
Users have the benefit of customising parachains for a wide range of uses. Polkadot’s two-layer software design allows users to perform transactions independently, more privately and efficiently. They can create blockchains without disclosing user data to the public network or that would otherwise require processing a larger number of transactions.
How does Polkadot compare to Ethereum?
They say Polkadot is the one cryptocurrency that has a good chance of knocking Ethereum off its second-place perch next to Bitcoin. Considering the founder of Polkadot is the ex-CTO of Ethereum, this may come as no surprise.
There are many similarities between Ethereum and Polkadot, but both have different strengths. To meet its scaling strategy, Ethereum will shortly rollout in 2025 its Ethereum 2.0 protocol. Polkadot was launched in the first quarter of 2025.
Key strengths
Ethereum’s key strength is its large and established ecosystem of developers, users and businesses. It has a rich set of developer tools and tutorials, and already enjoys significant network effects from this ecosystem. This makes Ethereum the ultimate platform on which to develop smart contracts.
Polkadot’s greatest strength is Substrate. This is a development framework for creating Polkadot-compatible blockchains and offers different levels of abstraction depending on developers’ needs. Substrate dramatically reduces the time, energy and money required to create a new blockchain.
Substrate also provides a much larger canvas for developers to experiment on, compared to Ethereum. It allows for full control of the underlying storage, consensus, economics and state transition rules of the blockchain. These are things you generally cannot modify on a standard smart contract platform.
Furthermore, the design of Polkadot allows for shared security within its network. There are two key benefits to shared security: it reduces the burden on parachain builders by providing security-as-a-service from the relay chain; and it provides a framework for parachains to talk to each other, which ultimately allows parachains to specialise.
Similarities
Where they overlap is both platforms were created to create smart contracts and deploy decentralised apps (dApps). The platforms provided smart contract functionality based on Solidarity for Ethereum and Ink! for Polkadot.
They are also both driven by a scaling strategy based on parallelised execution and use Wasm as an underling technology to power on-chain logic and state transitions. Ethereum 2.0 and Polkadot both use multiple-chain architecture and execute through multiple heterogeneous parachains.
Differences
Where they differ primarily is Ethereum’s technology controls pieces of logic on the single chain, whereas Polkadot aims to provide a framework for building your own blockchain and the ability to connect different blockchains with each other.
The biggest difference perhaps is what they are designed for. Ethereum aims to be the leading platform for decentralised finance (DeFi) and smart contract execution. Polkadot wants leading position as a platform to help people build entire blockchains and integrate these blockchains with each other.
For Ethereum 2.0, smart contracts will call each other synchronously in the same shard or asynchronously between shards. For Polkadot, smart contracts can call each other synchronously in the same parachain or asynchronously across parachains.
Ethereum 2.0’s governance will be off-chain, Polkadot is on-chain. Ethereum 2.0 will use Casper Proof of Stake; Polkadot uses BABE/GRANDPA Proof of Stake.
How is the Polkadot network secured?
Polkadot provides an infrastructure for blockchains to connect and share security with each other. Shared security is established through one common relay chain on which other parachains (blockchains) are connected. This allows nodes to participate in the consensus mechanism network.
How to invest in Polkadot (DOT)
DOT is the native token for Polkadot and is actively traded on the online retail market. It serves three distinct purposes:
- governance of the network
- staking
- bonding
DOT is listed on a number of popular exchanges that trade altcoins. However, unlike Bitcoin and other main cryptocurrencies, you cannot directly purchase DOT with fiat money. You can only buy DOT by first buying Bitcoin (BTC) or Ethereum (ETH) from any large exchange and transferring to the exchange that offers to trade DOT.
Follow these easy steps to buy DOT
Step 1: Register an account with a cryptocurrency exchange
Top 5 cryptocurrency exchanges:
Get started by providing the information required for your account to be verified. This is the Know-Your-Customers (KYC) process which is a legal requirement of cryptocurrency exchanges.
Provide a valid mobile number to set up two-factor authentication.
Select a strong password to make sure your account isn’t vulnerable to hackers.
Step 2: Buy cryptocurrency tokens with fiat money
Once your account has been verified, you will be asked to add a payment method. You have the choice of a credit or debit card or bank transfer. Credit card payments are instant but the transaction fee is higher.
You are now ready to buy cryptocurrency to exchange for DOT. You have the choice of Bitcoin (BTC) or Ethereum (ETH).
Step 3: Buy DOT with BTC or ETH
DOT is an altcoin, not a cryptocurrency. Therefore, you have to transfer your digital coins to an exchange where DOT is traded. We recommend Binance Exchange because it has a large number of tradable altcoin pairs.
You will go through the same process of registering an account with the altcoin exchange and verifying your account.
Step 4: Deposit BTC or ETH in your altcoin exchange account
Once you have completed the KYC process, you will have full access to your exchange wallet.
Follow the instructions to deposit BTC or ETH into your crypto-wallet.
Step 5: Start trading DOT
With BTC or ETH in your wallet, you can now buy DOT.
Step 6: Store DOT securely in a hardware wallet
Choose a hardware wallet that is easy to set up and easy to use. It should also be available on your smartphone or tablet for when you are out of the office.
Store your DOT in a hardware wallet, which means your altcoin is stored “off exchange” and not online. This is the safest way to store cryptocurrencies.
DISCLAIMER
Trading cryptocurrencies carries a high level of risk and may not be suitable for all retail traders and investors. Consider your capacity for risk before deciding to trade cryptocurrencies. There is the possibility that you could lose some or all of your initial investment so you should not invest money that you cannot afford to lose.
The information in this article is for education purposes only. Forex Trading Africa will not accept liability for any financial loss which may arise directly or indirectly from use of or reliance on information contained in this article.
Frequently Asked Questions
What is Polkadot?
Polkadot (DOT) is a scalable, interoperable and secure blockchain network that allows any type of data across any type of blockchain.
Is Polkadot risky?
No, Polkadot is not risky itself as a technology innovator.
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