What do you mean by DOT?
You guessed it, it’s time for another episode of Token Thursdays, where we break down the most popular cryptocurrencies in the market. This week we talk about another favourite of the community: POLKADOT (DOT)
What is Polkadot?
Polkadot, also known as DOT is the native cryptocurrency of the Polkadot network. The Polkadot network initially started development in 2017 and is co-founded by one of the founders of Ethereum, Gavin Wood. Wood is a prominent individual in the crypto development space as he invented Solidity, the programming language required to create D’apps on the Ethereum network. After a 3-year development phase, the network and token officially launched in May 2020.
How does the Polkadot network work?
Polkadot is designed in a way to operate two types of blockchains. The main network is called a relay chain, where transactions are permanent, and user-created networks are called parachains. It also has a connecting layer, or “bridge,” that allows value and data to be transferred between most blockchains.
DOT’s Key features
- On the Polkadot network, DOT is used for the purpose of carrying out the key functions of the platform.
- DOT has 3 key functions:
- Providing Governance to the network
- Operating the network
- Creating parachains by bonding
DOT Governance
The DOT governance consists of Council Members & a Technical Committee. The Council Members are comprised of elected DOT holders, who are responsible for proposing changes and determining which changes proposed by DOT holders are made to the software. Proposals by Council members require fewer votes to be approved than those by ordinary DOT holders.
The Techincal Committee consists of teams actively building Polkadot, this group can make special proposals in the event of an emergency. Members of the technical committee are voted in by Council members.
Network Operations
DOT is used to facilitate the consensus mechanism that underpins Polkadot. In order for the platform to function and allow for valid transactions to be carried out across parachains, Polkadot will rely on DOT holders to play active roles. Some active roles for DOT holders are Validator, Collator, Nominator or Fisherman.
Validators: Validators are those holders who validate the data in the parachains and participate in governance and consensus.
Collators: Collators are nodes that collect the data of parachains to send to Validators who in turn process them.
Nominators: Nominators are individuals that help in selecting Validators by staking their DOT to them.
Fishermen: Fishermen are members who observe the network to “fish” out any bad behaviour.
Bonding
On the Polkadot network to create new parachains DOT tokens are bonded. Outdated or non-useful parachains are removed by removing bonded tokens which is a form of Proof of Stake. Additionally, the bonded DOTs will be locked during their bonding period and will be released back to the account that bonded them after the duration of the bond has elapsed and the parachain is removed.
Where to buy DOT?
If you are looking to trade DOT with a fully insured wallet, simply head on over to DIFX and log in or create a new account to start trading!
About DIFX
DIFX is a centralized cross-asset crypto exchange that allows users to trade between multiple asset classes that include indices, forex, crypto, metals, and commodities, just to name a few. The DIFX fully-insured crypto wallet comes from a partnership with Fireblocks, one of the leading crypto custodians in the world.
The Nomination Program is another unique feature of DIFX that allows users to manage the future of their crypto assets by passing them on to their families and loved ones. Recently, the company unveiled its Futures trading platform in an attempt to further improve financial inclusion and freedom through innovations offered by blockchain technology.
DIFX was presented with the “Most Trusted Cross-Asset Trading Platform — 2022” by the Crypto Expo Dubai and “Best New Trading Platform Award” at the E-Business Awards 2021 by Entrepreneur Middle East and the Forex Expo 2021
To begin your journey with Endless Possibilities, download the app now from the iOS or Google Play Store, or visit us at difx.com.
