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What is the polkadot coin used for?



Apr 4, 2023 at 09:54

The Polkadot coin, also known as DOT, is the native cryptocurrency of the Polkadot network. DOT has several use cases, including:

  1. Governance: DOT holders can participate in the governance of the Polkadot network by staking their DOT tokens and voting on proposals to improve the network.
  2. Transaction fees: DOT is used to pay transaction fees on the Polkadot network, similar to how Ether (ETH) is used on the Ethereum network.
  3. Staking: DOT can be staked to secure the network and earn rewards for participating in block production and consensus.
  4. Bonding: DOT can also be used as collateral to bond parachains (independent blockchains) to the Polkadot network, enabling cross-chain interoperability.
  5. Funding: The Polkadot treasury, which is funded by a portion of the network’s transaction fees, is used to support development and maintenance of the network, as well as to fund community initiatives and projects.

Read Also: How To Stake Polkadot (DOT)? Latest (2023)

Overall, the Polkadot coin has a range of use cases within the Polkadot ecosystem, including governance, staking, bonding, transaction fees, and funding, and is a key component of the network’s functionality.

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