Polkadot is a decentralized platform that facilitates interconnectivity between different blockchain ecosystems in a trustless, scalable, and highly secure manner. In this manner, Polkadot’s technology enables the adoption of Web 3.0 technologies on a commercial level.
The Web3 Foundation, a Switzerland-based nonprofit organization, is responsible for the development of the Polkadot ecosystem. It forges partnerships with researchers and developers to make the Polkadot network an attractive platform to develop Web 3.0 applications on.
The Polkadot protocol supports cross-chain communication and transfer of data and assets across previously standalone, external blockchains. It makes it possible for different blockchain networks to connect to Polkadot’s platform as parachains and communicate with each other across both public, open and permissionless networks as well as private, permissioned blockchains.
To support its flexible connectivity offering across independent chains, Polkadot leverages a Nominated Proof-of-Stake (NPoS) consensus mechanism to secure its network in a highly energy-efficient, transparent, and reliable manner. DOT is the native digital token of the Polkadot ecosystem, and serves as both governance and utility token of the platform.
You can learn more about Polkadot(DOT) at our KuCoin Blog.
Polkadot operates a Relay Chain on which any number of blockchain networks can connect in the form of parachains (parallel chains). These parachains can have different characteristics, including technology, consensus algorithms, native digital assets, and infrastructure.
Where Polkadot truly shines is in offering an underlying infrastructure to allow these parachains to conduct transactions with each other using its Relay Chain feature. In the process, it offers fair execution of transactions and ensures robust security in the processes.
Independent blockchains with their own sets of validators can also connect to the Polkadot network using bridges instead of using shared resources from Polkadot’s pool. These bridges allow for seamless data and asset transfer, supporting interoperability between multiple blockchains without the need to be hosted on the Polkadot infrastructure.
Polkadot aims to offer a multi-chain environment with unlimited potential - there is no upper limit on the number of new parachains it can support. While the basic design can support hundreds of parachains, the infrastructure can potentially lead to the creation of mini Polkadot networks that can offer connections for more public and private chains and support more multi-chain transactions in the future.
Polkadot was the creation of Ethereum co-founder Dr. Gavin Wood, who is also known as the mastermind behind Solidity - the programming language for Ethereum’s smart contracts. The idea for Polkadot emerged from the concept of sharding, which could make Ethereum far more scalable, but ended up giving rise to a brand new blockchain network called Polkadot instead.
Dr. Wood released the first draft of Polkadot’s white paper in October 2016. Shortly after this, in 2017, he co-founded the Web3 Foundation in partnership with Peter Czaban to support the development and foster the adoption of the Polkadot network.
The token sale for Polkadot was held in late 2017 but resulted in freezing of most of the funds raised in its Parity multisig contract. This resulted in the loss of around one-third of proceeds from the sale, with ETH worth almost $90 million being compromised in the attack.
The Web3 Foundation then held another round of a private token sale in 2019, putting up around 500,000 DOT for sale and raising adequate funds to further work on the project. The Polkadot testnet went live in January 2019 while its sister network Kusama was released to the public in August 2019.
The first mainnet chain Phase 1 of Polkadot went live in May 2020, followed by Phase 2 which brought out the NPoS consensus on the network in June 2020. This was followed by the launch of Phases 3 and 4 which drove governance and decentralization functions within its community.
In the few years since it has been around, Polkadot’s DOT has quickly risen to become one of the top cryptocurrencies by market cap. As the 11th largest crypto by market cap per data in June 2022, it is one of the most actively traded digital assets in the global market, enjoying high liquidity and trading volume on top exchanges, KuCoin included.
The prospects for DOT as an investment asset look promising, especially as more chains connect to the Polkadot network and the platform’s interoperability quotient rises. The addition of more parachains to the ecosystem could drive the Polkadot price higher and make it a lucrative asset to invest in.
In addition, the DOT price statistics could receive an additional boost amid the rising adoption of Polkadot among Web3 projects. As Web 3.0 comes into the mainstream in the near future, Polkadot is poised to be one of the most promising ecosystems to run dApps.
DOT, the native cryptocurrency of Polkadot, has several use cases, including:
Polkadot is a truly decentralized platform, empowering DOT token holders with voting rights to decide how its technology evolves with time. As a DOT holder, you get to have.a say in how the protocol is upgraded.
You can stake your DOT crypto to improve the resilience of the overall Polkadot ecosystem. The staked DOT is distributed as rewards to honest nodes, encouraging good and responsible behavior while bad behavior by a node results in penalties.
DOT also plays a very important role in bonding native assets of parachains connecting to Polkadot. DOT holders can stake their cryptocurrencies towards these bonding processes, removing the bonded token tokens when the respective parachain ceases operations.
Polkadot is one of the most popular digital assets in the crypto market to invest in or trade against other cryptos. Do remember to check the Polkadot price, market cap, 24-hour trading volume and perform fundamental, technical, and sentiment analysis of the market before entering a new trade.
You can grow your crypto portfolio easily by HODLing DOT on KuCoin. Head to our Crypto Lending section and look up the Polkadot crypto from our list of offerings, enter the number of DOT you wish to use for lending liquidity and select the duration (7 days, 14 days or 28 days). You will then be able to see our daily interest rates and get an estimate on the profits you can earn by lending liquidity in DOT on KuCoin.
Polkadot-JS Wallet is the native crypto wallet of the Polkadot network. Here’s how you can transfer your DOT crypto from KuCoin exchange to the native Polkadot wallet:
1. Create an account on Polkadot-JS and set up your wallet if you don’t have one yet.
2. Buy DOT on KuCoin by exchanging other cryptocurrencies or stablecoins.
3. Note down your Polkadot-JS wallet address from your account.
4. Select the DOT token from your KuCoin trading account and click on the option to withdraw it.
5. Enter the number of DOT tokens you wish to send to Polkadot-JS and enter your wallet address in the destination box.
6. Verify the details of the transaction including the transaction fees you will be charged before confirming the order.
7. You will receive the DOT tokens from your KuCoin account in your Polkadot-JS wallet successfully within a few minutes.
Here are the steps to undertake if you wish to stake DOT on the native wallet Polkadot-JS:
1. Create an account on Polkadot-JS and add DOT funds by buying the cryptocurrency on exchanges like KuCoin and transferring them into the wallet.
2. You need to hold a minimum of 10 DOT tokens to stake on the Polkadot network via nomination.
3. Head to the Staking section under the Network tab within your Polkadot-JS wallet account after funding it.
4. Select your Stash and Controller accounts when you add a nominator and enter the number of DOT tokens you wish to stake.
5. Choose from the list of validators and confirm the transaction by clicking on the button “Bond and Nominate”. You will need to re-enter your password to validate the staking order.