This page serves as a high-level introduction to the Polkadot protocol with terminology that may be specific to Polkadot, notable differences to other chains that you may have worked with, and practical information for dealing with the chain.

## Tokens#

• Token decimals:
• Kusama (KSM): 12
• Base unit: "Planck"
• Balance type: u128

### Redenomination#

Polkadot conducted a poll, which ended on 27 July 2020 (block 888_888), in which the stakeholders decided to redenominate the DOT token. The redenomination does not change the number of base units (called "plancks" in Polkadot) in the network. The only change is that a single DOT token will be 1e10 plancks instead of the original 1e12 plancks. See the Polkadot blog posts explaining the details and the results of the vote.

The redenomination took effect 72 hours after transfers were enabled, at block 1_248_326, which occurred at approximately 16:50 UTC on 21 Aug 2020.

In Polkadot (and most Substrate chains), user accounts are identified by a 32-byte (256-bit) AccountId. This is simply the public key for the cryptography used by Substrate.

Polkadot (and Substrate) use the SS58 address format. This is a broad "meta-format" designed to handle many different cryptographies and chains. It has much in common with Bitcoin's Base58Check format such as a version prefix, a hash-based checksum suffix, and base-58 encoding.

See the SS58 page in the Substrate wiki for encoding information and a more comprehensive list of network prefixes.

Relevant SS58 prefixes for this guide:

• Kusama: 2
• Westend: 42

### Cryptography#

Polkadot supports the following cryptographic key pairs and signing algorithms:

• Ed25519
• Sr25519 - Schnorr signatures on the Ristretto group
• ECDSA signatures on secp256k1

Note that the address for a secp256k1 key is the SS58 encoding of the hash of the public key in order to reduce the public key from 33 bytes to 32 bytes.

## Existential Deposit#

Polkadot uses an existential deposit (ED) to prevent dust accounts from bloating state. If an account drops below the ED, it will be reaped, i.e. completely removed from storage and the nonce reset. Polkadot's ED is 1 DOT, while Kusama's is 33.3333 microKSM (0.0000333333 KSM). You can always verify the existential deposit by checking the chain state for the constant balances.existentialDeposit.

Likewise, if you send a transfer with value below the ED to a new account, it will fail. Custodial wallets should set a minimum withdrawal amount that is greater than the ED to guarantee successful withdrawals.

Wallets and custodians who track account nonces for auditing purposes should take care not to have accounts reaped, as users could refund the address and try making transactions from it. The Balances pallet provides a transfer_keep_alive function that will return an error and abort rather than make the transfer if doing so would result in reaping the sender's account.

Note: The Statemint parachain has a lower existential deposit than the Relay Chain (0.1 DOT and 0.000003333 KSM) as well as lower transaction fees. It is highly recommended to handle balance transfers on Statemint. Statemint integration is discussed in the next page of the guide.

## Free vs. Reserved vs. Locked vs. Vesting Balance#

Account balance information is stored in AccountData. Polkadot primarily deals with two types of balances: free and reserved.

For most operations, free balance is what you are interested in. It is the "power" of an account in staking and governance, for example. Reserved balance represents funds that have been set aside by some operation and still belong to the account holder, but cannot be used.

Locks are an abstraction over free balance that prevent spending for certain purposes. Several locks can operate on the same account, but they overlap rather than add. Locks are automatically added onto accounts when tasks are done on the network (e.g. leasing a parachain slot or voting), these are not customizable. For example, an account could have a free balance of 200 DOT with two locks on it: 150 DOT for Transfer purposes and 100 DOT for Reserve purposes. The account could not make a transfer that brings its free balance below 150 DOT, but an operation could result in reserving DOT such that the free balance is below 150, but above 100 DOT.

Bonding tokens for staking and voting in governance referenda both utilize locks.

Vesting is another abstraction that uses locks on free balance. Vesting sets a lock that decreases over time until all the funds are transferable.

## Extrinsics and Events#

### Extrinsics#

Extrinsics constitute information from the outside world and take on three forms:

• Inherents
• Signed Transactions
• Unsigned Transactions

As an infrastructure provider, you will deal almost exclusively with signed transactions. You will, however, see other extrinsics within the blocks that you decode. Find more information in the Substrate documentation.

Inherents contain information that is not provably true, but validators agree on based on some measure of reasonability. For example, a timestamp cannot be proved, but validators can agree that it is within some delta of their system clock. Inherents are not gossiped on the network, and only block authors insert them into blocks.

Signed transactions contain a signature of the account that issued the transaction and stands to pay a fee to have the transaction included on chain. Because the value of including signed transactions on-chain can be recognized prior to execution, they can be gossiped on the network between nodes with a low risk of spam. Signed transactions fit the concept of a transaction in Ethereum or Bitcoin.

Some transactions cannot be signed by a fee-paying account and use unsigned transactions. For example, when a user claims their DOT from the Ethereum DOT indicator contract to a new DOT address, the new address doesn't yet have any funds with which to pay fees.

### Transaction Mortality#

Extrinsics can be mortal or immortal. The transaction payload includes a block number and block hash checkpoint from which a transaction is valid and a validity period (also called "era" in some places) that represents the number of blocks after the checkpoint for which the transaction is valid. If the extrinsic is not included in a block within this validity window, it will be discarded from the transaction queue.

The chain only stores a limited number of prior block hashes as reference. You can query this parameter, called BlockHashCount, from the chain state or metadata. This parameter is set to 2400 blocks (about four hours) at genesis. If the validity period is larger than the number of blocks stored on-chain, then the transaction will only be valid as long as there is a block to check it against, i.e. the minimum value of validity period and block hash count.

Setting the block checkpoint to zero, using the genesis hash, and a validity period of zero will make the transaction "immortal".

NOTE: If an account is reaped and a user re-funds the account, then they could replay an immortal transaction. Always default to using a mortal extrinsic.

### Unique Identifiers for Extrinsics#

Note: The assumption that a transaction's hash is a unique identifier is the number one mistake that indexing services and custodians make. This error will cause major issues for your users. Make sure that you read this section carefully.

Many infrastructure providers on existing blockchains, e.g. Ethereum, consider a transaction's hash as a unique identifier. In Substrate-based chains like Polkadot, a transaction's hash only serves as a fingerprint of the information within a transaction, and there are times when two transactions with the same hash are both valid. In the case that one is invalid, the network properly handles the transaction and does not charge a transaction fee to the sender nor consider the transaction in the block's fullness.

Imagine this contrived example with a reaped account. The first and last transactions are identical, and both valid.

IndexHashOriginNonceCallResults
00x01Account A0Transfer 5 DOT to BAccount A reaped
10x02Account B4Transfer 7 DOT to AAccount A created (nonce = 0)
20x01Account A0Transfer 5 DOT to BSuccessful transaction

In addition, not every extrinsic in a Substrate-based chain comes from an account as a public/private key pair; Substrate, rather, has the concept of dispatch “origin”, which could be created from a public key account, but could also form from other means such as governance. These origins do not have a nonce associated with them the way that an account does. For example, governance might dispatch the same call with the same arguments multiple times, like “increase the validator set by 10%.” This dispatch information (and therefore its hash) would be the same, and the hash would be a reliable representative of the call, but its execution would have different effects depending on the chain’s state at the time of dispatch.

The correct way to uniquely identify an extrinsic on a Substrate-based chain is to use the block ID (height or hash) and the extrinsic's index. Substrate defines a block as a header and an array of extrinsics; therefore, an index in the array at a canonical height will always uniquely identify a transaction. This methodology is reflected in the Substrate codebase itself, for example to reference a previous transaction from the Multisig pallet.

### Events#

While extrinsics represent information from the outside world, events represent information from the chain. Extrinsics can trigger events. For example, the Staking pallet emits a Reward event when claiming staking rewards to tell the user how much the account was credited.

If you want to monitor deposits into an address, keep in mind that several transactions can initiate a balance transfer (such as balances.transferKeepAlive and a utility.batch transaction with a transfer inside of it). Only monitoring balances.transfer transactions will not be sufficient. Make sure that you monitor events in each block for events that contain your addresses of interest. Monitor events instead of transaction names to ensure that you can properly credit deposits.

### Fees#

Polkadot uses weight-based fees that, unlike gas, are charged pre-dispatch. Users can also add a "tip" to increase transaction priority during congested periods. See the transaction fee page for more info.

### Encoding#

Parity's integration tools should allow you to deal with decoded data. If you'd like to bypass them and interact directly with the chain data or implement your own codec, Polkadot encodes block and transaction data using the SCALE codec.

Polkadot allows runtime upgrades without a hard fork. The runtime is a Wasm binary stored on-chain and can be updated using your chain’s governance mechanism.

## Smart Contracts#

The Polkadot Relay Chain does not support smart contracts.

## Other Networks#

Besides running a private network, Polkadot has two other networks where you could test infrastucture prior to deploying to the Polkadot mainnet.

Kusama Canary Network: Kusama is Polkadot's cutting-edge cousin. Many risky features are deployed to Kusama prior to making their way into Polkadot.

## Other F.A.Q.#

Can an account's balance change without a corresponding, on-chain transaction?

No, but not all balance changes are in a transaction, some are in events. You will need to run an archive node and listen for events and transactions to track all account activity. This especially applies to locking operations if you are calculating balance as the spendable balance, i.e. free balance minus the maximum lock.

What chain depth is considered "safe"?

Polkadot uses a deterministic finality mechanism. Once a block is finalized, it cannot be reverted except by a hard fork. Kusama has had hard forks that had to revert four finalized blocks in order to cancel a runtime upgrade. Using a finalized depth of ten blocks should be safe.

Note that block production and finality are isolated processes in Polkadot, and the chain can have a long unfinalized head.

Do users need to interact with any smart contracts?

No, users interact directly with the chain's logic.