Polkadot is one of the latest blockchain-based projects, focused on interoperability and scalability, and already a big player in the sector of decentralized finance (DeFi). DOT is the native token to the network much like ether (ETH) is native to the Ethereum blockchain, or BTC to Bitcoin network. Moreover, Polkadot is compared to the Ethereum network and is considered to be a “supercomputer” with utility in Dapp development. As a native cryptocurrency to the Polkadot network, DOT has several functions. How to use DOT and what is DOT used for?
Utility Cases for Polkadot (DOT)
As the native crypto to the network, DOT has three main utility functions to support operations on the Polkadot network:
- DOT is used for Polkadot network governance
- DOT can be staked for network operations
- DOT can be used to connect parachains to Polkadot blockchain that way supporting interoperability
Using DOT for Network Governance
Any holder of DOT cryptocurrency can participate in the Polkadot network governance, that way establishing decentralized and unbiased blockchain governance. Holders can use DOT to vote for new changes, adding and removing parachains, network upgrades and updates, and other important operations on the network. Governance is achieved through holders and under a set of automated rules.
How to Stake DOT?
DOT is being staked by DOT holders to facilitate consensus on the network and enable transaction verification. DOT stakeholders can stake their DOT balances to protect the network as the staked DOT is used to prevent malicious activity on the network. DOT can be staked by creating a Polkadot Stash account and Polkadot Controller account and easily claiming and staking DOT cryptocurrency.
DOT and Parachains
DOT can be locked for a certain period to assure connection between a certain para chain and the network. When the parachain is not used any longer, DOT is unlocked and the balance is returned to the owner.