Original text: https://messari.io/report/state-of-polkadot-q4-2024
Author: Messari
Compiled by: OneBlock+
On February 7, Messari, the world's leading cryptocurrency data analysis agency, released the Polkadot 2024 Q4 Ecosystem Report , which comprehensively analyzed the Polkadot ecosystem development, economic trends, technological progress, and market performance. The report shows that Polkadot's monthly transaction volume surged by 200%, DOT's market value hit a two-year high , cross-chain interoperability was greatly improved, the developer ecosystem continued to be active, and the market performance was strong. OneBlock+ compiled and sorted out the key points of the report to quickly understand the latest developments in the Polkadot ecosystem.
The key data mentioned in the report are as follows:
Transaction volume surges: Polkadot's monthly transaction volume increased from 20 million in January 2024 to nearly 60 million in November, a 200% increase . This growth was mainly due to the strong performance of Rollups such as Neuroweb and Frequency.
Enhanced cross-chain interoperability: Polkadot launched Snowbridge (a trustless Polkadot-Ethereum cross-chain bridge) and Hyperbridge (which uses ZK proofs and coprocessor technology to securely transfer assets between multiple chains such as Ethereum, Optimism, Arbitrum, Base, BNB and Gnosis), further improving interoperability.
High performance test: The Spammening test conducted on its experimental network Kusama reached 143,343 TPS (23% resource utilization), and it is expected to reach 623,000 TPS under full load and maintain stable operation under high load.
Active developer ecosystem: Polkadot remains a core platform for blockchain innovation, with more than 1,200 active developers per month who benefit from its native SDK (formerly known as Substrate).
Strong market performance: DOT’s market capitalization increased 71% year-over-year to $1.64 billion, a two-year high, demonstrating strong investor confidence.
Polkadot Ecosystem Growth: Active Transactions, Cross-Chain Breakthroughs, and Developer Expansion
Transaction surge: transaction volume increased from 20 million to 60 million
Transaction activity in the Polkadot ecosystem increased significantly by about 200% in the second half of 2024, with monthly transactions increasing from 20 million in January to nearly 60 million in November. Among them, Neuroweb developed by Origin Trail led the way in the fourth quarter with an average of 26 million transactions per month (a 136% increase from the previous quarter), and Frequency's average monthly transaction volume increased from 7 million in the third quarter to 9 million in the fourth quarter. Phala, Litentry and Mythos also contributed considerable transaction volume.
The adoption of cross-chain bridges has further driven this growth trend. Snowbridge, a trustless bridge connecting Polkadot and Ethereum, was launched in June 2024, with a total locked value of more than $70 million at the end of the year. Hyperbridge , launched on November 7, is the first verifiable multi-chain bridge connecting Polkadot, Ethereum, Optimism, Arbitrum, Base, BNB and Gnosis. It improves security through a coprocessor model and zero-knowledge proof of finality verification on the chain. It processed more than 600,000 cross-chain messages in two rounds of testnets and was verified by 66 independent relayers.
XCM interoperability upgrade: daily message volume increased by 66%
The Cross-Consensus Message Format (XCM) is a standardized message format and language that enables seamless communication between rollups and other consensus systems. In the fourth quarter of 2024, Polkadot's XCM activity grew significantly, with an average daily transfer of 1,841 times (a 53% increase from the previous quarter), other messages of 255 times/day (a 300% increase from the previous quarter), and the total daily average message volume increased by 66% to 2,096 times. During the same period, the ecosystem's high-yield farming opportunities grew. Bifrost launched a 1 million DOT incentive plan in October 2024 for liquidity pools on platforms such as StellaSwap and Beamswap, which once made the annualized yield of the BNC-DOT pair on StellaSwap reach 423%, and the total locked value of its vDOT-DOT pool increased 20 times to US$622 million, while maintaining an annualized yield of 19.92%.
Rollup activity: transaction volume increased, active addresses decreased slightly
Although the transaction volume of the Polkadot ecosystem increased significantly in the fourth quarter, the number of active addresses decreased: the average daily active addresses dropped from 14,000 in the third quarter to 11,500. The average monthly active addresses of the relay chain in the fourth quarter were 122,919, and rollups were 68,847. Among them, Moonbeam, Acala and Mythos ranked first in the number of active addresses, with market shares of 15%, 3.6% and 2.7% respectively.
Developer ecosystem: 1,261 monthly active developers
Polkadot has one of the largest developer communities in the crypto industry: According to Electric Capital, as of October 2024, Polkadot has 1,261 monthly active developers (460 of whom are full-time), ranking fourth in the crypto industry in terms of developer size, second only to Ethereum, Base, and Polygon. According to Artemis statistics, in the fourth quarter of 2024, Polkadot had an average of 117 weekly active core developers and 420 active ecosystem developers.
Economic trends: market value surge, treasury expansion and inflation optimization
Market capitalization growth: hit a two-year high
In the fourth quarter of 2024, DOT's market value rebounded significantly. After experiencing a market correction in the third quarter, its market value increased by 71% month-on-month, from US$6.2 billion to US$10.2 billion, and reached US$16.4 billion in early December, a two-year high. During the same period, DOT's market value ranking was adjusted from 16th to 19th, but it still surpassed Bitcoin Cash and Pepe.
Transaction fees: Up 333%, but costs remain low
Thanks to the network architecture design, Polkadot's transaction fees are lower than those of its competitors. In the fourth quarter of 2024, as the transaction volume of the Polkadot ecosystem increased, the transaction fees generated by the Relay Chain also increased significantly: the total transaction fee surged from US$113,737 in the third quarter to US$492,141, a month-on-month increase of 333%, and the average transaction fee per transaction also increased from US$0.02 to US$0.03. Polkadot still maintains low transaction costs, while benefiting from the growing transaction volume, making the economic model of the Relay Chain more robust.
Treasury funds: Annual expenditure increased 3.2 times
The Polkadot Treasury obtains funds through block rewards, validator penalties, transaction fees, and pledge efficiency losses . These funds are stored in the system account and expenditure allocation is made every 24 days. Unused funds will be destroyed by 1%. After the implementation of OpenGov, the activity of treasury funds has increased significantly, and the distribution of assets has been extended to the relay chain, Asset Hub, and Hydration chain to manage assets such as DOT, USDT, and USDC. According to Dotlake data, treasury expenditures in 2024 increased by 3.2 times year-on-year, mainly used for promotion (US$58.8 million), development (US$28.7 million), and economic incentive programs (US$17.2 million). Expenditure peaked in April-May and then gradually declined, with a balance of US$168 million at the end of the fourth quarter of 2024.
Token supply: inflation mechanism optimization
Polkadot's native token DOT is mainly used for governance, staking, and access to block space . It adopts an inflationary monetary policy and has no maximum supply limit. In July 2023, the community introduced a new destruction mechanism to use all coretime rental income for destruction to control inflation levels while ensuring that at least 20% of the annual inflation rate enters the treasury (when the staking ratio reaches 60%). This caused the staking reward to drop from 16.67% to 13.33%, and as the inflation rate is further reduced to 8%, the staking reward may drop to 10.67%. As of the fourth quarter of 2024, the circulating supply of DOT was 1.5 billion (a month-on-month increase of 7.3%), and the staking supply was 782 million, accounting for 51% of the staking supply (a month-on-month increase of 13.4%). These adjustments will help optimize the DOT economic model in the long term and maintain token liquidity and ecological security.
Network Ecosystem: Security, Expansion, and Governance Innovation
Relay Chain: Activity increased by 45% month-on-month
Polkadot's Relay Chain is mainly responsible for security and connecting to Rollup , and users' main trading activities mostly take place in the Rollup ecosystem. Despite this, Relay Chain still supports token transfers, staking, validator elections, and governance voting, and the RFC-0032: Minimal Relay proposal plans to migrate some subsystems to the system Rollup to improve network efficiency. In the fourth quarter of 2024, the activity of Relay Chain increased significantly, with an average of 9,000 active addresses per day (a 45% increase from the previous month), an average of 6,700 return addresses per day (a 28% increase from the previous month), and an average of 2,300 new addresses per day (a 139% increase from the previous month) , showing a stable development trend of the ecosystem.
Security: Number of active validators increased to 500
Polkadot uses a Nominated Proof of Stake (NPoS) mechanism to maintain the decentralization of the validator set. Validators are rewarded based on Era Points every 24 hours, and nominators are incentivized to select low-stake validators to obtain higher returns, thereby maintaining a balanced distribution of the validator set. After the passage of Proposal 888, the number of active validators increased to 500 in the fourth quarter.
In addition, the Web3 Foundation launched a decentralized node program in October 2024, allowing validators to apply for up to two nodes and be screened based on technical capabilities, reliability, and ecological contributions . As of the end of the fourth quarter of 2024, the number of nominators was 31,200 (a decrease of 14% month-on-month), and the number of nomination pools was 233 (a decrease of 1% month-on-month) , providing users with a way to merge staked DOTs and share rewards.
Decentralized governance: OpenGov empowers communities to make decisions
The OpenGov governance model completely reforms Polkadot's referendum process, achieves decentralized decision-making, and supports multiple referendums in parallel to speed up decision-making efficiency. The Parliament and Technical Committee are replaced by Fellowship (Developer DAO) , which ensures governance transparency through community voting, checks and balances, and flexible delegation mechanisms .
Governance participation increased significantly in 2024, with referendum proposals increasing by 150% year-on-year and voting rates increasing by 40% year-on-year. Important referendums this quarter included Proposal 1200 (increasing active validators from 400 to 500, with 99.7% approval) and Proposal 1271 (setting an annual inflation rate of 120 million DOTs to optimize the economic model), fully demonstrating the decentralized nature of Polkadot community governance.
Polkadot Development Roadmap
In the fourth quarter of 2024, Polkadot core technology continued to evolve, laying the foundation for Polkadot 2.0. Asynchronous Backing and Agile Coretime were fully implemented, driving the growth of parachain transaction volume. Elastic Scaling is expected to be launched in the first quarter of 2025 , completing the last piece of the puzzle for Polkadot 2.0. You can learn more about Polkadot 2.0 through this article from Messari:
🔍 https://messari.io/report/polkadot-2-0-rebirth-an-overview
Key technology progress
JAM technology development: On November 11, 2024, Gavin Wood shared Polkadot JAM technology through global tour speeches and blogs to promote ecological understanding. On November 29, Parity released the Polkadot JAM Rust SDK to provide developers with JAM-based development tools.
Developer Tools and SDKs: Ajuna Network launched the Polkadot Unity SDK for Gaming to help game developers integrate blockchain technology into game projects.
Towards Polkadot 2.0: Gavin Wood emphasized that horizontal scaling is the optimal solution , which is highly consistent with Polkadot's decentralized concept. In the future, JAM Grid will be launched to build a decentralized Web3 supercomputer, and user experience optimization and brand upgrade will be carried out.
Smart Contracts and Developer Experience: Parity focuses on native support for Ethereum-compatible smart contracts , while lowering development barriers, optimizing costs, and improving stablecoin usability.
📊 Conclusion
In the fourth quarter of 2024, Polkadot's transaction volume and technological progress increased significantly, with monthly transaction volume climbing to 60 million by November, with Neuroweb and Frequency leading the way. Agile Coretime introduced a dynamic resource allocation mechanism to enhance network scalability , while the launch of cross-chain solutions such as Snowbridge and Hyperbridge made asset transfers more efficient and secure. By December, DOT's market value increased by 71% month-on-month, reaching a maximum of US$16.4 billion, and transaction fees rose simultaneously, reflecting the increase in network activity . At the same time, treasury funds continued to invest in ecological expansion and technological development, and OpenGov governance reforms further optimized decision-making processes and promoted community participation. Looking ahead, Polkadot plans to complete the transition to Polkadot 2.0 and advance JAM technology to completely revolutionize the network architecture and pave a broader development path for the decentralized ecosystem.
