What is $DOT?
An explanation of DOT and why you should add DOT to your portfolio.
We cannot discuss $DOT without giving a brief over view of Polkadot. Polkadot is a blockchain protocol that connects multiple blockchains into one network. Taking a critical look at the project you will know that this project is out to solve problems as it has a lot of use case senieros. Polkadot is also now gaining a lot of interest as it is now listed on major exchanges such as Binance, OKEx and Kraken.
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The purpose of Polkadot is to enable blockchain networks to improve scalability, optimize themselves for specific use cases, work and communicate together, self-govern, and upgrade without the need for hard forks. In this article, we look at Polkadot’s current status, its role in Decentralized Finance (DeFi), the $DOT token and more.
Now lets take a dive into Polkadot’s Token ($DOT) The symbol for polkadot’s token is $DOT. $DOT is the native/utility asset of the Polkadot ecosystem. For anything to be called useful it must have a purpose, The $DOTserves three main functions which are 1)governance 2) staking, 3) and bonding. It has a total supply of 10 million DOT. I would go deeper into explaining the three purposes listed above and we will start GOVERNANCE Governance Looking at governance i believe it is a concept we understand outside the Blockchain ecosystem and it is not so diffrent. DOT holders can dictate the up’s and down’s on the platform. The beautiful aspect of this is that the Authority to dictate is not give to the holders by someone. But rather, it is embedded in the protocol of Polkadot that DOT holders inherently have governance capabilities. In some other article I will discuss this “gorvenance capabilities”
Staking For validation Polkadot utilizes NPoS (Nominated Proof of Stake) as its algorithm. A DOT holders Can participate in this essential and rewarding network operation.
In a simple explanation $DOT holders will get rewards for staking their $DOT in the protocol. This can also act as control and keeps bad actors from participate in the network, as they will lose their stake if they don’t act right. At present, the following exchanges offer staking-as-a-service for Polkadot: Kraken, Huobi, MXC, and KuCoin.
Bonding The last use case for the DOT token is bonding — this is the process of tying up DOT in order to add new parachains. Asking what parachin is? Then read my article on “A brief introduction into Polkadot”
Now to the question of the day Why should I add DOT to my portfolio? The reason remains clear and simple There are specific problems of blockchains that Polkadot solves, like many blockchains, are slow and get clogged up. But Polkadot is a heterogeneous shared blockchain which makes it a fast scalable blockchain. Another issue is upgrading blockchains. Deciding how to proceed when something goes wrong on-chain, is also hard. Polkadot holds a powerful set of functions that can be utilized for Defi programs. We will see some very fascinating use cases by enabling individual blockchains to be established.
