Polkadot (DOT) review of a promising cryptocurrency

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Today, Polkadot is not just a cryptocurrency, but a huge ecosystem: two functional “parent” blockchains, dozens of projects launched on them from different domains, and the DOT corner itself, which is in the TOP-10 of cryptocurrencies by capitalization.

What is Polkadot and how does it work

Polkadot is an open-source decentralized blockchain, a foundational 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 a single space that allows you to quickly and securely process and exchange data from different blockchains.

One of the main features, 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 transmits information about transactions and the number of coins in wallets, on the basis of the Ethereum network, you can create arbitrary “smart contracts” and issue coins in the ERC-20 standard.

The developers of Polkadot went even further and implemented the possibility of creating networks of other projects based on their blockchain. These derived networks are called parachains.

Parachain is an independent blockchain with its own coin 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 auction details will be discussed later.

Gavin himself has repeatedly stated that the Polkadot project is not a direct competitor to Ethereum and will take its own new niche in the crypto industry.

DOT cryptocurrency: capitalization, current rate and predictions

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.

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To date, the capitalization of the project exceeds $20 billion, despite the fact that the auctions in the mainnet have not yet been launched. Judging from the roadmap of the project, auctions for parachains will take place this year, which means that we may soon see an increase 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 must mention another related project from the creators of Polkadot – Kusama.network

Kusama Experimental Network

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 during which parachain auctions take place). This allows developers to quickly refine 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 soon debut at the Polkadot auction.

Parachain auctions

The number of “slots” in the Polkadot network is limited, there are just over a hundred, and to rent a slot to host their parachain, a candidate project must win an auction, and this can be done using the DOT corner (or KSM in Kusama networks). Participation coins can be bought or borrowed from users – to make a crowd loan (participatory loan). If the project wins a slot for the parachain, the coins participating in the auction are frozen for a period of one year. During this period, they cannot be used or withdrawn. In order to motivate coin holders to participate in auctions, candidate projects offer rewards for voters. As a rule, these are corners of the project itself. Therefore, it is worth taking the most responsible approach to choosing a project to vote for.

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 to earn what you want. If 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 at a cryptocurrency casino and try to increase your cryptocurrency savings. But ! The most important thing to remember is that you need to play crypto casinos with a cool mind. Not in any way, not in order to make money, but in order to have a good time.

Nominators and validators

The current version of the network is built on the principle of NPOS (Nominated Proof of Stake). Users can receive rewards when they stake (freeze) coins on the network. Users who stake their coins are called nominators. Nominators appoint validators, i.e. those who confirm transactions using their servers – this is an analogue of mining in the Bitcoin network. For transactions, pools of validators receive commissions, which are distributed among nominators based on their share of staked coins.

When staking, the nominator can choose multiple validators, this will allow them to minimize the likelihood of not winning a reward due to an incorrect or unstable validating server.

DOT coin staking step by step guide

To date, staking of the Polkadot corner is not possible. The developers have identified errors that occur with a large number of nominators and introduced a limit of 22,500 nominators and a staking size of 40 DOTs, learn more here. At the same time, while trying to stake, the system gives the error “Staking.TooManyNominators”.

All the main functions for working with the network are implemented in the flexible user interface of Polkadot-JS Apps.

  1. 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.
  2. We save the secret pop-up seed phrase in a safe place inaccessible to outsiders.
  3. Create an account name and password
  4. After registration we will have a seed phrase and a json file with a password for the account
  5. You can now stake DOT. In the drop-down menu of the Network item, select the Location option, then the Assignment tab
  6. Choice of validators. You can write their addresses manually or mark them with asterisks. We will need it in the next steps.
  7. Go to the account functions tab and add a candidate
  8. Select a wallet and add previously selected validators

It is important to remember that after canceling staking, your funds will be “unfrozen” 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 sale).

Conclusion

Every day, new projects are created in the crypto industry, but only a small part of them deserve attention, and Polkadot is one of those projects that is not yet proven.

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Polkadot (DOT) review of a promising cryptocurrency


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