Polkadot's DOT token fell about 9% in a day as leveraged positions were forced out and futures funding rates turned negative. The drop came even as a governance vote to launch Polkadot's own stablecoin, dotUSD, passed with about 98.4% of votes in favor.
DOT dropped to $1.106, down about 9.15% from where the slide began, as leveraged traders pulled back.
The token had traded at $1.21 on October 6 before drifting lower into the night, then losing ground fast: in a few minutes it fell from about $1.19 to near $1.12. A small bounce to $1.14 followed a few hours later, but it didn't hold, and DOT kept leaking lower through the day.
Futures market shows the damage
Open interest in DOT futures fell from $91 million to about $85 million during the crash, as leveraged positions were taken out in a hurry. It has since recovered to around $87.4 million.
Funding rates also turned negative, dropping to -0.0016%, after staying positive for most of the past week. Traders who were betting on DOT rising a few days ago are now paying to bet it falls.
A stablecoin vote moves forward
The sell-off came even as Polkadot advanced on other fronts. Referendum 1944, a governance proposal, calls for launching dotUSD, Polkadot's own stablecoin, alongside a DOT/dotUSD liquidity pool funded with $2.5 million each in USDT and DOT. At the time of writing, the proposal had passed with about 98.4% of votes in favor against 1.6% opposed. Polkadot has also been inviting developers to try its Devnet, a pre-mainnet testing environment. But the sell-off doesn't mean either development was driving DOT's short-term price action.
Revenue still lags market cap
According to Chainspect data, the Relay Chain handles about 1,400 transactions a day, bringing in roughly $23 a day in fees over the past 30 days, or about $8,400 a year. DOT's market cap sits around $2 billion, 96% below its 2021 peak of $52 billion, and still about 240,000 times its yearly revenue.
Source: AMBCrypto
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