Polkadot has made a significant decision that could affect DOT price and support ecosystem growth. The community voted to lower the inflation rate.
Community Backs Inflation Reduction
Polkadot announced a decrease in DOT inflation rate to 7.78% from the previous 10% per annum. This was resolved through the OpenGov decentralized governance system. Lowering inflation means reducing the number of DOT tokens created daily, which could reduce selling pressure. This development might positively affect long-term DOT value.
Will Lower Inflation Support Network Growth?
Analysts argue that this decision might support Polkadot’s comprehensive growth. Lowering inflation will significantly reduce the total DOT tokens in circulation, increasing scarcity if demand persists. Lower inflation also enables better management of the staking reward system.
Price Movement and Market Sentiment
As of this writing, DOT price has climbed by 2.44% to $4.89. Over the past seven days, DOT has shown intense volatility, fluctuating between $4.40 and $4.90. Despite this, investors remain optimistic, with trading volume surging by 42.58% in the last 24 hours. The announcement of lowered inflation could trigger short-term accumulation of DOT.
The reduction in DOT inflation rate could have significant implications for Polkadot’s growth and price movement. Combined with upcoming network upgrades, further price increases may occur.
