Polkadot

What is Polkadot (DOT)?

Polkadot is an open source blockchain and Layer 0 metaprotocol. It was created with the goal of unifying different blockchains. However, by and large, its purpose is to provide foundational network for Web3 development. DOT is the native token of the Polkadot network.

If you are interested in the price of Polkadot, check out the chart above.

Polkadot is essentially called the “blockchain blockchain.” It connects specialized blockchains into one scalable network. Having done this, Polkadot allows users to transfer any type of data or assets across multiple networks. These networks include oracles, permissionless networks, and public and private blockchains.

Since Polkadot is a layer 0 protocol, this means that Polkadot sits under other blockchains. This allows the network to autonomously update its own codebase without creating any forks. Of course, the community must first propose and decide on these updates.

Keep in mind that the price of DOT, like many other cryptocurrencies, tends to fluctuate. Therefore, before making any purchasing decisions, be sure to keep an eye on the project’s price charts.

History of the Polkadot network

Polkadot certainly has an interesting history. Some people tend to associate this with Ethereum stating that Polkadot uses Ethereum to perform operations. Even though this has some relevance to Ethereum, what you read in the previous sentence is not true.

The creator of Polkadot is Gavin Wood. If you’re not new to the world of crypto, you know that he was the CTO of Ethereum (hence the connection to Ethereum). Robert Habermeyer and Peter Chaban are the other two co-founders of the project.

The first version of Polkadot was released in 2019 as a canary called Kusama. The network has not been checked. However, in 2020, the original Polkadot block came out. Kusama is now like a dedicated space on the Polkadot network that acts as test networkallowing developers to test various updates.

Polkadot network structure

At first glance, Polkadot looks like a standard blockchain. However, if we look deeper, it consists of four parts – Relay Chain, Parachains, Paraflows and Bridges.

The relay chain is the core of Polkadot.. It revolves around building consensus, interoperability and shared security. On the other hand, parachains are individual chains connected by the Polkadot network. Each parachain can have its own token and utility.

Parathreads are also something like parachains, but they are based on a cost-effective pay-as-you-go model. Parachains and paraflows are connected by bridges. In addition to serving as a link between parachains and paraflows, bridges also allow them to interact with external blockchains.

Additionally, when talking about the structure, it is important to note that Polkadot uses a designated Proof-of-Stake (NPoS) mechanism. The mechanism consists of nominators and validators. Essentially, this is what makes the Polkadot network secure.

Validators these are the ones that protect the network by staking Polkadot tokens and confirming transactions. Nominators also stake their DOT tokens, but do so to support the validators.

Additionally, Polkadot’s treasury is another thing that keeps the network secure. In fact, every time tokens are traded within the network, a portion of the trading commission goes to the treasury. It can then be used to improve the network.

Main features of the Polkadot network

The Polkadot network can have many shortcuts. However, the main ones include the following:

• Community driven network. One of the features of the Polkadot crypto asset is that it provides management rights to its owners. In this way, Polkadot users can contribute to various changes and updates to the Polkadot network;
• Shared multi-chain network. This feature is related to Polkadot’s scalability. This allows the blockchain to process multiple transactions on different blockchains simultaneously;
• Highly versatile and adaptable network. The Polkadot network can be upgraded without creating a fork. In addition, the network allows users to easily share information and functions with each other.

What about the DOT token?

Now that you know the gist of the Polkadot network, let’s get back to its token. First, please note that the DOT token is inflationary. This means that its supply is not fixed.

Polkadot coins were originally minted on Ethereum (again a connection to Ethereum) during the first ICO. At that time, 10 million DOT tokens had been issued, of which 5 million were sold, raising $145 million.

As mentioned above, like most crypto assets on the market, Polkadot’s price is quite volatile. This means that the price of DOT is influenced by various factors that affect the entire market.

When it comes to using the Polkadot token, it can be used in three ways:

• For bid. By staking DOT tokens, users receive rewards and contribute to the security of the network;
• For connection. By pegging DOT tokens, new parachains are added to the network. Thus, by deleting tokens, you can also delete obsolete parachains;
• How governance token. DOT token holders have the opportunity to participate in decision-making processes on the Polkadot network.