Polkadot (DOT) is now Listed on Fox.Exchange
fox.exchange is glad to announce the listing of Polkadot’s DOT token on its exchange.
As the blockchain ecosystem grows, the demand for tools that enable seamless communication between different blockchain networks increases. That is why we have partnered with the team from Polkadot to bring our users the DOT token.
What is Polkadot?
Polkadot is a new type of blockchain whose main purpose is to enable interoperability between multiple Blockchains while enabling simplified cross-chain communications on one blockchain network.
To achieve its goal of a multi-chain framework that standardizes communication across multiple Blockchains, the Polkadot network features a unique design that uses the main network called the Relay Chain that connects other networks called Parachains.
The Relay chain acts as the main hub that also coordinates different Parachains to ensure accurate transfer of data. The Parachain (which is similar to a blockchain or a data structure network) seeks to plug into the Relay Chain to communicate with other Blockchains/networks.
Therefore, the Relay Chain acts as a browser where users can access multiple Parachains. It is the backbone of the Polkadot protocol as it offers block validation and security for all connected Parachains.
Given the current limitations of the protocol, there are only a limited number of Parachains that are allowed at any given time on the Relay Chain. Therefore, different Parachains have to compete for a slot in the Relay Chain through a public auction.
How does Polkadot work?
As mentioned, Polkadot uses ‘Parachains’ on the Relay Chain. To process multiple transactions efficiently, a process called “sharding” is used.
By specialization, each Polkadot Parachain serves as a separate application on the Relay Chain with a specific purpose. By this design, the Polkadot protocol can be upgraded without the need for hard forks as is popular on most Blockchains.
Apart from its use of Parachains, Polkadot also uses ‘Parathreads’ that operate as lighter alternatives to Parachains. These allow developers to try out the Polkadot framework on a “pay as you go” model.
There are also “Bridges” that act as modular contracts connecting an application (Parachain) to established Blockchains such as Ethereum or Bitcoin.
How the Dot token is used on Polkadot?
The DOT token is famous for its 2017 ICO that managed to raise about $140 million.
Polkadot also raised another $100 million in two private token sales of the DOT token in 2019 as well as in 2020.
The DOT token is used for governance and staking on the Polkadot network. DOT token holders can make decisions on future updates to the protocol through a proof of stake consensus. Relay Chain participants are also required to hold the DOT token to get access to similar privileges as miners on other networks. Therefore, the token gives holders powers to govern the protocol’s upgrades.
To incentivize honest behavior among token holders, Polkadot’s proof of stake consensus protocol rewards good actors and punishes bad actors.