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Polkadot is an open-source project founded by the Web3 Foundation. Unlike many projects in the blockchain space, it is designed to coexist with the leading smart contracts protocols rather than compete against it.
Its whitepaper was announced in 2016 by Gavin Wood, who was one of the key Ethereum founding members and CTO. It has an active ecosystem and is home to numerous projects.
Since Polkadot is a sharded protocol, the computational workload across its network is spread out. This means that processing of transactions can occur on several chains, which makes the creation and connection of decentralized applications, services, and institutions easier.
The DOT refers to the native cryptocurrency of the Polkadot Network.
Due to a process of redenomination, DOT’s circulating supply inflated by 10 times in August 2020. The redenomination just means that one DOT was divided into 100 DOT, making the total supply increase from 10 million tokens to 1 billion.
The Polkadot community’s reasoning for a redenomination is to make shares seem more affordable to smaller investors by increasing liquidity. In the words of the platform’s creator Gavin Wood, this was to make buying—“more ergonomic.”
DOT is fully supported on Coinhako, this means that you can buy, sell, swap, send and receive DOT at Coinhako!
The token is used for three distinct purposes which are: governance, staking, and bonding.
The token gives DOT holders complete governance over the protocol. Holders will have the privilege to participate in decisions over upgrades and fixes, determining fees or the auction dynamics.
Staking and Bonding
The token also facilitates staking your token which allows eligibility for getting newly minted token and fees. The third function of DOT is its ability to add new parachains by tying up DOT (this is called “bonding”). Bonding means that you prove your commitment to the network by allowing them to lock a defined amount of your token for a certain time.
Staking and bonding are different ways that the core function of a Proof of Stake (POS) blockchain consensus engine is maintained.
Polkadot's meteoric price spike after the launch of its main net on August 20, substantiates strong interest in the protocol from the market. At this time of writing, the number of DOT in circulation stands at 904 million and Polkadot will definitely have an impact on the way we build things on the internet going forward.
You can view Polkadot's Whitepaper to learn more about the digital currency
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