What are DOTs?¶
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.
Currently, DOTs have 15 decimal places, while the smallest unit is called the Femto-DOT. You can compare the Femto-DOT to Satoshis or Wei, while the DOT is like a bitcoin or an ether.
What are the uses of DOTs?¶
DOTs 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.
DOTs for governance¶
The first function of DOTs will be to entitle holders to control of the governance of the platform. Some functions which will be 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.
The governance mechanism will not be formally granted to all holders of DOTs but rather the underlying code of Polkadot will enable a holder of DOTs to participate in governance.
DOTs for consensus¶
DOTs 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 DOTs to play active roles. Participants will put their DOTs at risk (via staking) to perform these functions. The staking of DOTs acts as a disincentive for malicious participants whom will be punished by the network by getting their DOTs slashed. The DOTs required to participate in the network will vary depending on the activity which is being performed, the duration the DOTs will be staked for, and the total number of DOTs staked.
DOTs for bonding¶
DOTs will have the ability to be bonded for a duration of time in order to add a new parachain to the network. The DOTs 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.
Web3 Foundation will distribute up to 20% of mainnet DOTs prior to network launch later this year (see Light Paper or the Polkadot Network FAQ). As Project Founder Gavin Wood said in his year-end recap, there may be a generally available public sale for some portion of that amount at some point this year. Subscribe to the Polkadot newsletter on polkadot.network for further updates.
Warning: Mainnet DOT tokens are not transferrable until mainnet launch, expected late 2019. Therefore any transfers of Mainnet DOTs are illegitimate and unauthorized. DOTs can not be moved from a current allocation address. Individuals with an allocation of DOTs who transfer their DOT address to someone else can always keep a copy of their private key, therefore there is extreme risk for individuals participating in transfers of DOTs before mainnet launch.
Testnet dots are freely available now - see below for various ways to obtain them.
DOTs are required to make transactions on the Polkadot network. Testnet DOTs do not have any value beside allowing you to experiment with the network.
Getting testnet DOTs¶
You can make your own DOTs by becoming a validator.