Polkadot

1. What is Polkadot (DOT)?

DOT is the native currency of Polkadot, a Layer 0 blockchain.

2. Who created Polkadot?

Polkadot was created by Ethereum co-founder Gavin Wood. The Polkadot whitepaper was published in 2016, followed by a nine-figure funding round to bootstrap the project. Polkadot launched its mainnet in 2017.

3. How does Polkadot work?

Polkadot originally sought to realize the vision for sharding articulated early in Ethereum’s development, where computation is split across an ecosystem of multiple chains operating in parallel.

Polkadot achieved this by adopting a “Layer 0” architecture, where the base Polkadot Relay Chain provides limited functionality in the form of DOT transfers and a Proof of Stake consensus Layer. Developers can launch Layer 1 networks called “parachains” that inherit security from the base Relay Chain, with parachains providing advanced functionality including smart contract execution.

4. What is the maximum supply of DOT?

There is no hard limit on the supply of DOT, which inflates at a rate of 10% annually.

5. What are the benefits of using Polkadot?

Polkadot now plans on replacing its Relay Chain with a modular Join-Accumulate Machine (JAM) base layer facilitating generic functionality including smart contract execution.

JAM will support the permissionless deployment of decentralized applications (dApps) as rollups, meaning developers building on the network will no longer need to launch as sharded Layer 1 networks by default. Rollups deploying on JAM will be able to purchase computation resources on a monthly basis, rather than bid for long-term parachain slots through Polkadot’s existing parachain auction mechanism.

6. What are the risks of using Polkadot?

Cryptocurrencies are subject to significant price volatility. Centralized exchanges pose counterparty risk to users, while non-custodial wallets can be targeted by hackers and scammers, and can be lost forever if a user fails to securely store their private keys. Some legal jurisdictions have also sought to crack down on cryptocurrency trading and related activities.

7. What is DOT’s historic price range?

DOT tagged an all-time low of $2.70 on Aug. 20, 2020, and posted a record high of $54.98 on Nov. 04, 2021.