Note: The DOT redenomination took place on 21 August, now to be known as Denomination Day, at block #1,248,328.
While DOT is the unit of currency on Polkadot that most people use when interacting with the system, the smallest unit of account is called the Planck. A Planck's relation to DOT is like the relation of a Satoshi to Bitcoin. Before 21 August, the DOT was denominated as 1e12 Planks, that is twelve decimal places. After this date, DOT is denominated as 1e10 Plancks, as in ten decimal places. DOT denominated to twelve decimal places is referred to as "DOT (old)" and DOT denominated to ten decimal places is referred to as "New DOT".
The change in denomination, henceforth referred to as the redenomination, was voted on by the community of DOT holders. The community decided between four options, to change the DOT denomination by a factor of ten, one hundred, one thousand, or not at all. The end result was to change the denomination by a factor of one hundred.
The overall effect of this change was that the number of Polkadot's smallest unit, the Planck, remains constant, while the DOT balance for all holders was increased by a factor of one hundred. As one can see from the example below, the number of Planks that a user has does not change, only the number of Planks that constitute a single DOT. So, a user with 1,000,000,000,000 Plancks still has the same number of Plancks, but will have 100 DOT under the new denomination.
Before the change the decimal was here v 1.000000000000 DOT 100.0000000000 DOT ^ After the change the decimal is here
There are no state changes with redenomination. There are no transfers. The real change regards the social consensus around where to put the decimal place when we talk about what constitutes a DOT.
The initial vote for redenomination occurred as a referendum on the Kusama blockchain. The referendum was summarized as having four effects if approved by KSM holders.
- The total allocations of DOT will increase one hundred times from 10 million to 1 billion.
- DOT allocation balances will increase by a factor of one hundred, such that 1 DOT will be 100 DOT.
- The distribution of DOT does not change, and holders of DOT still own an equal share of the network as before the change.
- The precision of DOT will change from 12 decimal places to 10 decimal places.
- The main benefit of this change is to avoid using small decimals when dealing with DOT and to achieve an easier calculation system.
The initial referendum was proposed prior to the Polkadot genesis block under the assumption that making a redenomination would be simpler before the Polkadot chain was live. However, many in the community pointed out the disconnect of the two networks and how it was unfair for holders of DOT to be impacted by a vote by a different token holder set. For this reason, the Web3 Foundation decided to make a new vote on Polkadot when it went live, although the Kusama vote ended with a majority in favor of the redenomination change.
The Web3 Foundation summarized the decision not to change:
However, given the non-negligible amount of opposition, including from some within the ranks of Web3 Foundation and Parity, the Foundation decided that we cannot, in good faith, sponsor redenomination at present.
After the genesis block of Polkadot was created and the network was running with a decentralized community of validators securing the network, Web3 Foundation decided to put the redenomination topic up to a vote again. This time, the vote was explicitly binding — meaning that it would be executed if voted through. In comparison, the vote on Kusama was of course non-binding, being at best a way to capture a signal without a direct way to affect the Polkadot chain.
Based on the feedback received during the Kusama referendum, the Polkadot vote was held as an approval vote, with four available options. DOT holders could issue votes for any configuration of the four options: no change, a change of 10x, a change of 100x, or a change of 1000x. The vote logic was contained in a specially-built Substrate pallet that was included in Polkadot's runtime for this poll.
The important notes of the Polkadot vote are as follows:
- Any combination of the four options may be approved of by the voter. There is no need to select only one option!
- Approving of all or none of the options is equivalent and will not affect the outcome.
- All voters may alter their votes any number of times prior to the close of the poll.
- Voting costs nothing other than the transaction fee and can be done from all accounts with a non-zero spendable balance. (If you managed to lock up all of your funds in staking to the point that none is left for transacting and you would like to vote, please contact a representative of the Web3 Foundation.)
- Locked funds (e.g. for staking) are counted.
- No discretionary lock-voting is in place; all DOT used to vote counts the same.
- Voting is made on a per-account basis; a single account must all vote the same way and cannot split its vote.
- This vote does not affect any economics of the Polkadot platform. Staking rewards, inflation, effective market capitalization and the underlying balances of every account remain completely unchanged. It is “merely” about what units we use to denominate the balances into “DOT” for the purpose of display.
With a voting period of two weeks set, the redenomination was now in the hands of the Polkadot community for a final, binding decision.
After two weeks of voting, the results of the redenomination vote were tallied. About one third of the total DOT in the network participated in the vote. The redenominaton proposal passed with 86% of the voters favoring a 100x factor increase (or two decimal places of precision loss).
Polkadot's redenomination is taking place on 21 August, now to be known as Denomination Day, at block #1,248,328
What This Means for the Community
If you're a DOT holder or user of the network, then you do not need to take any action. The DOT redenomination is a purely front-end change. You will still hold the same amount of Plancks after the change, but now it will appear that you hold 100x more DOT. This change applies proportionally to everyone.
What This Means for Builders of Tools
If you are the builder of a tool that consumes the
@polkadot/api package — then there should
be no real changes that need to be made in your application. The denomination is technically a
cosmetic change and every value is still a constant amount of Plancks.
However — if you are a builder of a tool that displays DOT balances to users (e.g. a wallet) or handles DOT balances in an off-chain or custodial way, then you will likely need to anticipate the redenomination by changing some constants in your code.
Please see our Ecosystem Redenomination Guide for recommendations.
Please reach out to [email protected] if you need any assistance in making sure your software is compatible with the redenomination.