Polkadot Leads A Rotation Into Old Layer-1s As Hike Odds Widen
Polkadot led gains among older layer-1 tokens, climbing 16.7% on the day and 42.5% over the week as Cosmos Hub, Decred and Ethereum Classic also posted strong advances. Bitcoin and ether finished lower on the day while traders increased the odds of a 25-basis-point Federal Reserve rate rise ahead of next week’s FOMC meeting.
Why It Matters
The move highlights renewed trader interest in pre-2018 layer-1 networks and comes as markets price a higher chance of Fed tightening, factors that can influence crypto risk appetite and liquidity. Polkadot’s rally is tied to an on-chain referendum that would introduce a native stablecoin and commit treasury funds, a concrete governance event not present for its peers.
Key Facts
- Polkadot 24h change: +16.7% to $1.25
- Polkadot 7d change: +42.5% (largest weekly gain among top 50 tokens)
- Polkadot volume and market value: $420 million volume; $2.13 billion market value
- Polkadot governance: OpenGov Referendum 1944 ('dotUSD') went on-chain at 11:49 a.m. ET Monday; voting running ~97.5% in favor; 2,343,074 DOT for vs 59,896 opposed; 558,519 DOT of support vs 1.67 billion DOT electorate
- Stated treasury commitment in referendum: $2.5M in USDT to mint dotUSD and $2.5M in DOT initially allocated to the liquidity pool
A cluster of older layer-1 tokens outperformed on Tuesday, with Polkadot powering the move. DOT surged 16.7% in the U.S. session to $1.25 and finished the week up 42.5% on $420 million of trading volume, making it the top weekly gainer among the 50 largest tokens. That advance coincided with OpenGov Referendum 1944, a Polkadot proposal to introduce dotUSD, a protocol-native stablecoin that would be backed initially by $2.5 million in USDT and $2.5 million in DOT from the treasury. Cosmos Hub, Decred and Ethereum Classic also posted double-digit weekly gains alongside Polkadot, rising 23.3%, 19.4% and 18.3% respectively, despite lacking a dated catalyst in the period. Only Polkadot had an explicit on-chain event; its referendum went on-chain at 11:49 a.m. ET Monday and the text describes dotUSD as decentralised and operated by on-chain logic without a central issuer. The Polkadot Community Foundation submitted the measure and disclaims operational control. Major market indicators diverged. Bitcoin traded at $78,539, down 0.83% over 24 hours but up 1.6% for the week, while ether was at $2,484.83, down 0.29% on the day and up 2.8% for the week. Total crypto market capitalization was about $2.70 trillion on $91.54 billion of volume, with bitcoin dominance at 58.36%. Market sentiment readings showed the Crypto Fear & Greed Index at 69, having held above 60 since Aug. 29. Macro and commodity moves underpinned market positioning. Polymarket traders raised the probability of a 25-basis-point Federal Reserve hike next week to 54.5% on $104.6 million of contract volume, reflecting a three-session widening of tightening odds ahead of the FOMC meeting Sept. 15-16. Oil prices also climbed: Brent settled at $99.31 a barrel, its highest close since July 23, and West Texas Intermediate rose to $94.25. Labor data showing 162,000 jobs added in August and upward revisions to June and July helped shape the tightening narrative ahead of September’s inflation releases.
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