What is Polkadot?
Polkadot is a blockchain network designed to link many separate blockchains together. Its mainnet launched in 2020. It was created by Gavin Wood, a co-founder of Ethereum, together with Robert Habermeier and Peter Czaban. The Web3 Foundation supports the project, and the company Parity Technologies has led much of its software development.
DOT is Polkadot's native coin. It is used for staking, governance and paying for network resources. Polkadot also has an on-chain treasury, a pool of DOT that holders can vote to spend on development and other projects.
How does it work?
At the center of Polkadot is the relay chain. Its job is to provide security and coordination rather than to host most apps. Separate blockchains, often called parachains, connect to it. Each can be built for a specific purpose, such as finance or gaming, while relying on the relay chain's validators for security. This is known as shared security, and it means a new chain does not need to recruit its own set of validators.
Polkadot uses nominated proof of stake. Validators lock up DOT to produce and check blocks, and other holders, called nominators, back validators they trust with their own DOT. Rule changes are decided on-chain, with DOT holders voting on proposals.
What is it used for?
DOT is mainly used to run and govern the network rather than as a payment coin.
- Staking as a validator or nominator to secure the network and earn rewards
- Voting on upgrades and treasury spending through on-chain governance
- Paying for blockspace that connected chains use
- Paying transaction fees
Key facts
- Mainnet launched: 2020
- Creators: Gavin Wood, Robert Habermeier and Peter Czaban; supported by the Web3 Foundation
- Consensus: nominated proof of stake
- Native blockchain: Polkadot relay chain
Explainer written by Finvane from official project documentation. It is not investment advice.