Having launched in August 2020, Polkadot has solidified its position as one of the most innovative projects, which is reflected in their rise to top 10 ranking cryptos in just over 12 months. Polkadot brings in several specialized blockchains in order to offer a simplified way of accessing DeFi marketplaces.
How Polkadot Can Benefit Every Blockchain
Polkadot’s main benefit to the crypto industry is to create a network by connecting multiple solidified blockchains that have demonstrated promise, in different areas of expertise like finance, web decentralization, asset management, and governance. Sharing of data between independent chains is currently limited and Polkadot aims to become the bridge between the many differing networks and chains that are currently available.
Polkadot’s network boasts several features that can benefit multi-blockchain involvement, which include scalability, upgradeability, heterogeneous sharding, transparent governance, and cross-chain composability.
DOT – Polkadot’s Native Utility Token
The DOT token contains three use cases:
- Governance: DOT token holders – Relay Chain participants – have complete control over the blockchain protocol. Privileges including event managing and protocol updates/fixes.
- Staking: Token holders are incentivized to behave honestly using game theory. They are rewarded by this system through good acting, but bad acting will result in stake loss. This way, the network is secure.
- Bonding: Bonding tokens represent each parachain that is added to the ecosystem, which is a proof of stake. Any chain that renders useless, outdated, or not receiving regular updates will be removed through the removal of bonded tokens.