Today, Polkadot is not just a cryptocurrency, but a huge ecosystem: two functional “parent” blockchains, dozens of projects launched on it from different domains, and the DOT angle itself, which is in the TOP-10 of cryptocurrencies in terms of capitalization.
What is Polkadot and how does it work?
Polkadot is an open-source decentralized blockchain, a fundamental network that enables the development of parachains on its own, simplifying the development of blockchains for new projects.
The developers themselves on the official project site and our FrCasinoSpot consultant Catherine Morel use the term “multi-chain” to describe the technology. Simply put, Polkadot is a network that connects blockchains in one space, allowing you to quickly and securely process and exchange data from different blockchains.
One of the key features is that the developers envision smooth updates – without massive system-wide updates or hard forks.
Why is Polkadot called the Aether Slayer?
Just as the Ethereum network is called the killer of Bitcoin, the Polkadot network is called the killer of Ethereum itself. Unlike the Bitcoin network, which only forwards information about transactions and the number of coins in wallets, the Ethereum network allows you to create arbitrary “smart contracts” and spend coins in the ERC-20 standard.
The developers of Polkadot went even further and implemented the ability to create networks from other projects based on their blockchain. These derived networks are called parachains.
Parachain is an independent blockchain with its own currency and the ability to optimize functionality for specific tasks and project needs. Parachains not only have all the benefits of Polkadot, but can also interact with other projects within the network. The number of places for parachains in the Polkadot network is limited, these places will be distributed through auctions. More details about the auction will be discussed later.
Gavin himself has repeatedly stated that the Polkadot project is not a direct competitor to Ethereum and will occupy its own new niche in the crypto industry.
DOT Cryptocurrency: Capitalization, Current Rate and Forecasts
The first ICO (initial coin sale) of the DOT cryptocurrency took place in the fall of 2017. Then 2.7 million coins were sold at a price of $0.29 per token.
The Dot coin reached its peak price of $49.69 on May 25, 2021, and the coin’s peak capitalization was over $43 billion.
To date, the project’s capitalization is over $20 billion, despite the fact that the mainnet auctions have not yet launched. Judging by the project roadmap, auctions for parachains will take place this year, meaning that we may soon see a rise in the DOT coin rate associated with the participation of these coins in auctions.
In addition to the value transfer function, Polkadot network coins are used for:
- vote in a parachain auction
- appoint validators
- vote on project development
All this allows the owner of the coins to receive income, but I will talk about this a little later, but for now I have to mention another related project from the creators of Polkadot – Kusama.network
Experimental network Kusama
Kusama.network is an experimental network very similar to the Polkadot network. At the same time, the developers point out that the network is viable and independent from the main polkadot network. The Kusama network has its own KSM coin, which performs the same functions as the DOT coin
The Polkadot network differs from the Kusama network in a shorter time frame (internal time periods in which parachain auctions take place). This allows developers to quickly fine-tune their blockchains before moving them to the Polkadot mainnet.
To date, the first auctions have already taken place in the Kusama network. One of the brightest projects is Karura, a test blockchain from the AcalaNetwork project, which will debut at the Polkadot auction soon.
The number of slots in the Polkadot network is limited, there are just over a hundred of them, and in order to rent a slot to host their parachain, a candidate project must win an auction, and this can be done with using the DOT angle (or KSM in Kusama networks). Participation coins can be bought or borrowed from users – to create a crowd loan (participation loan). If the project wins a slot for the parachain, the coins participating in the auction will be frozen for a period of one year. During this period, they cannot be used or revoked. To motivate coin holders to participate in auctions, candidate projects offer voter rewards. As a rule, these are corners of the project itself. Therefore, it is worth choosing a project to vote for in the most responsible way.
Auctions on the DOT network have not yet taken place, the first should take place after the auctions on the Kusama network. We look forward to the end of this year. Auctions are a kind of entertainment game. You pay money to try and earn what you want. When we talk about the cryptocurrency market, a direct analogy to this can be called a crypto casino, where you can make a deposit and withdraw money in cryptocurrencies. It is possible to experience this kind of sensation starting with a small one. For example with free casino games. After playing a bit, you can try playing in a cryptocurrency casino and try to increase your cryptocurrency savings. But ! The most important thing to remember is that you have to play crypto casinos with a cool mind. In no way, not to make money, but to have a good time.
Nominators and validators
The current version of the network is built according to the principle of NPOS (Nominated Proof of Stake). Users can receive rewards when they bet (freeze) coins on the network. Users who wager their coins are called nominators. Nominators appoint validators i.e. those who confirm transactions using their servers – this is an analog of mining in the Bitcoin network. For transactions, pools of validators receive commissions, which are distributed among nominators based on their share of coins wagered.
When staking, the nominator can choose multiple validators, thus minimizing the chances of not winning a reward due to an incorrect or unstable validating server.
Withdrawing DOT coins step by step guide
To date, staking the Polkadot angle is not possible. The developers have identified errors that occur with a large number of nominators and have introduced a limit of 22,500 nominators and a bet size of 40 DOTs, read more here. At the same time, the system gives the error “Staking.TooManyNominators” while trying to shut down.
All the main functions for working with the network are implemented in the flexible user interface of Polkadot-JS Apps.
- First you need to create an account. In the top menu we find Accounts, in the drop-down menu select Accounts and click on the Add Account button.
- We keep the secret pop-up seed phrase in a safe place that is not accessible to outsiders.
- Create an account name and password
- After registration, we will have a seed phrase and a json file with a password for the account
- You can now bet DOT. From the drop-down menu of the Network item, select Location and then the Mapping tab
- Choice of validators. You can write their addresses manually or mark them with asterisks. We need it in the next steps.
- Go to the account functions tab and add a candidate
- Select a wallet and add previously selected validators
It is important to remember that after canceling strike, your money will be “frozen” no earlier than 28 days!
Where to Buy Polkadot Project DOT Coin
Project coins have already been added to all major exchanges, both centralized and decentralized.
The easiest way to buy a DOT coin is on an exchange, for example on Binance, where you can pay with bank cards (Visa, Mastercard) and buy from users (P2P sales).
New projects are created every day in the crypto industry, but only a small part of them deserve attention, and Polkadot is one of those projects that has not yet been proven.