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- The increase in costs was accompanied by a more than twice as large increase in the number of daily active users.
- DOT rose 14.65% last week and nearly 57% month-to-date.
Multichain protocol Polkadot [DOT] witnessed a sharp increase in activity on the chain in December.
According to AMBCrypto’s analysis of Token Terminal data, weekly transaction fees on the relay chain reached an all-time high (ATH) of $2.6 million between December 18 and 25.
This represented a huge jump of 1218% from the total fees collected the week before.
For the curious, the relay chain acts as the governance layer of the network, securing, controlling, and connecting various parachains.
Source: Token terminal
The increase in costs was accompanied by a more than twice as large increase in the number of daily active users. During the aforementioned period, an average of 15.3,000 users accessed the network daily.
Inscriptions effect?
Like other blockchains, the spurt was driven by high demand for inscriptions, according to a noted crypto researcher and pseudonym Emperor Osmo on X (formerly Twitter).
Similar to Bitcoin Ordinals, inscriptions work by embedding images or other data directly into the chain. They can be used to create unique digital assets such as non-fungible tokens (NFTs) and even decentralized applications (dApps).
While Bitcoin was the first to witness this madness, the unique concept was gradually picked up by other L1s and L2s as well. Sign-ups were the main driver driving transactions and fees across networks in December.
DOT increases 57% in December
As is known, part of the total fees earned on the network goes to DOT token holders who manage the protocol. Logically, this means that a spike in fees could increase demand for DOT. This is what exactly happened.
DOT rose 14.65% last week and nearly 57% since early December, AMBCrypto noted using CoinMarketCaps facts.
Realistic or not, here is DOT’s market cap in BTC terms
The rally generated a lot of social traction for the cryptocurrency. According to AMBCrypto’s analysis of CoinMarketCap’s data, mentions of the coin on major crypto-focused social media channels have increased significantly.
Source: Santiment
The uptrend also caught the attention of speculative traders. DOT’s Open Interest (OI) rose 26% last week, signaling an influx of new capital into the derivatives market.