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Details: ht
What is DOT?
DOT is the native coin of the Polkadot network, considered the smallest unit within the Polkadot ecosystem ( which includes Substrate and Kusama). In technical terms, the "Plank" is the minimum denomination of DOT, comparable to what Satoshi represents for Bitcoin or Wei for Ethereum.
Function of the DOT token in the Polkadot ecosystem
DOT plays multiple fundamental roles within the Polkadot network:
Governance: DOT holders can participate in important decisions about the future and development of the Polkadot network through voting.
Staking: The DOT token is used in the Nominated Proof of Stake consensus mechanism (NPoS), where validators and nominators secure the network by locking up their tokens.
Bonding: For a parallel chain (parachain) to connect to the (relay chain) of Polkadot, a certain amount of DOT needs to be locked as collateral.
The technology behind Polkadot
Polkadot was designed as a layer 0 protocol that enables interoperability between different blockchains. Its innovative architecture consists of:
Relay Chain: The core of Polkadot, responsible for the security of the network, consensus, and interoperability between chains.
Parachains: Specific blockchains for applications that connect to the Relay Chain, allowing for the parallel processing of transactions.
Bridges: Connections that allow the transfer of data and assets between Polkadot and other external blockchains such as Bitcoin or Ethereum.
This unique structure allows Polkadot to function as a platform that facilitates secure communication between different blockchains, enabling a true decentralized and interconnected web ecosystem.