What are DOT?
DOT is the native token of the Polkadot network in a similar way that BTC is the native token of Bitcoin or ether is the native token of the Ethereum blockchain.
The smallest unit of account in a Substrate network (Polkadot, Kusama, etc.) is the Planck (a reference to Planck Length, the smallest possible distance in the physical Universe). You can compare the Planck to satoshis or wei, while the DOT is like a bitcoin or an ether. Kusama tokens (KSM) are equal to 1e12 Planck, and Polkadot mainnet DOT are equal to 1e10 Planck.
Note: This changed at block #1,248,328. Previously, DOT were denominated as equal to 1e12 Planck, just like Kusama. This denomination is deprecrated, and, if necessary, referred to as "DOT (old)". See Redenomination of DOT for more details.
What are the uses of DOT?
DOT serve three key functions in Polkadot, (i) to be used for governance of the network, (ii) to be staked for operation of the network, and (iii) to be bonded to connect a chain to Polkadot as a parachain.
DOT can also serve ancillary functions by virtue of being a transferrable token. For example, DOT stored in the Treasury can be sent to teams working on relevant projects for the Polkadot network.
These concepts have been further explained in the video Usage of DOT and KSM on Polkadot and Kusama
DOT for governance
The first function of DOT is to entitle holders to control of the governance of the platform. Some functions that are included under the governance mechanism include determining the fees of the network, the addition or removal of parachains, and exceptional events such as upgrades and fixes to the Polkadot platform.
Polkadot will enable any holder of DOT to participate in governance. For details on how holders can participate in governance, as well as their rights and responsibilities, see the governance page.
DOT for consensus
DOT will be used to facilitate the consensus mechanism that underpins Polkadot. In order for the platform to function and allow for valid transactions to be carried out across parachains, Polkadot will rely on holders of DOT to play active roles. Participants will put their DOT at risk (via staking) to perform these functions. The staking of DOT acts as a disincentive for malicious participants whom will be punished by the network by getting their DOT slashed. The DOT required to participate in the network will vary depending on the activity that is being performed, the duration the DOT will be staked for, and the total number of DOT staked.
DOT for bonding
DOT will have the ability to be bonded for a duration of time in order to add a new parachain to the network. The DOT will be locked during their bonding period and will be released back to the account that bonded them after the duration of the bond has elapsed and the parachain is removed.
DOT may have a lock placed on them to account for vesting funds. Like other types of locks, these funds cannot be transferred but can be used in other parts of the protocol such as voting in governance or being staked as a validator or nominator.
Vesting funds are on a linear release schedule and unlock a constant number of tokens at each block. Although the tokens are released in this manner, it does not get reflected on-chain automatically due to the fact that locks are lazy and require an extrinsic to update.
There are two ways that vesting schedules can be created.
- One way is as part of the genesis configuration of the chain. In the case of Polkadot and Kusama, the chain specification genesis script reads the state of the Polkadot Claims contract that exists on the Ethereum blockchain and creates vesting schedules in genesis for all the allocations registered as being vested.
- A second way is through an extrinsic type available in the Vesting pallet,
vested_transfer. The vested transfer function allows anyone to create a vesting schedule with a transfer of funds, as long as the account for which the vesting schedule will be created does not already have one and the transfer moves at least
MinVestedTransferfunds, which is specified as a chain constant.
Vesting schedules have three parameters,
starting_block. The configuration of these three fields dictate the amount of funds that are originally locked, the slope of the unlock line, and the block number for when the unlocking begins.
Like simple payouts, vesting is lazy, which means that someone must explicitly call an extrinsic to update the lock that is placed on an account.
vestextrinsic will update the lock that is placed on the caller.
vest_otherwill update the lock that is placed on another "target" account's funds.
These extrinsics are exposed from the Vesting pallet.
Obtaining Testnet DOT
DOT are required to make transactions on the Polkadot network. Testnet DOT do not have any value beside allowing you to experiment with the network.
You can also make your own WNDs (testnet DOT) by becoming a validator.
Polkadot Mainnet DOT
Polkadot Mainnet DOT are not freely given away. If you purchased DOT in original 2017 offering, you may claim them via the Polkadot claims process.