Polkadot founder Gavin Wood has proposed a Proof-of-Personhood model to correct a $500 million a year problem for the blockchain, a potential catalyst for the Polkadot price outlook.
The altcoin has rallied 32% over the past 10 days as investors buy the news on major regulatory progress.
Geopolitical and macroeconomic FUD no longer clouds the narrative, with ever-closer regulatory clarity fueling a capital rotation into the altcoin market.
Markets are now pricing in “Crypto Week,” as the GENIUS Act awaits final action while the CLARITY act and the Anti-CBDC Surveillance State Act advances to the US Senate.
Proof-of-Personhood Could Save Polkadot $410 Million a Year
During the Berlin 2025 Web3 Summit, Wood suggested replacing the existing Nominated Proof-of-Stake (NPoS) validation model with identity-based Proof-of-Personhood (PoP).
Under the current NPoS setup, Polkadot spends $500 million annually to reward validators. This staking-related issuance accounts for around 85% of DOT’s 10% annual inflation.
Wood argues this is unsustainable, as it encourages capital hoarding rather than rewarding real value or participation.
The proposed PoP model would strengthen Sybil resistance and aims to replace outdated tools like CAPTCHA, SMS, and KYC, which are increasingly vulnerable in an AI-driven world.
With it, Wood anticipates an 80% cut in security costs to $90 million via fixed validator salaries, KYC, and an issuance model with biannual reward halvings.
This would mirror Bitcoin-style halvings, shifting Polkadot from an inflationary model to one with store-of-value properties, especially with the proposed hard cap of 3.14 billion DOT.
Polkadot Price Analysis: Is a $10 DOT in Play?
By slashing inflationary pressures and creating artificial scarcity, the PoP proposal creates more favourable supply-demand dynamics for long-term growth.
Near-term, the Polkadot price rally stands to see a correction as it exhausts the full breakout momentum of a descending channel forming since its early May local top.
The pattern’s projected 0.5 Fibonacci retracement level top at $4.34 has been surpassed, and momentum indicators now show cracks in buy pressure that could lead to a correction.
The RSI now sits above the oversold threshold at 72, an area that typically precedes corrections as buyers reach their point of exhaustion.
Still, the MACD line continues to widen its gap above the signal line, a strong sign that an uptrend is the prevailing trend despite some friction.
The immediate 0.382 Fibonacci retracement level at $4 is the most credible support, marking a correction of 8% that could form a base for the next move once volatility stabilises.
From there, a decisive move above $4.34 would confirm bullish continuation toward a key historic support zone at $5.44 —a potential 23% climb from current levels.
Looking further ahead, Polkadot would enter a zone of sparse resistance, with $6.50, $7.50, and $8 being the key levels to watch before a full return to its previous $11.60 all-time high.
With altcoin season drawing fresh retail liquidity to strong narratives and fundamentals, if Wood’s proposal passes a community vote, DOT could be the one to reap this fresh demand.
Polkadot Might Not See The Biggest Altseason Run
The truth is, Polkadot has been in the background for months as traders chased fresher narratives. During altcoin season, attention is what attacks fresh retail flows.
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The post Polkadot Price Prediction: Can DOT Reach Double-Digit Price In July 2025 as Founder Unveils Proof-of-Personhood Plans? appeared first on Cryptonews.
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