News - What makes Polkadot (DOT) so special?

By Mike Hesp

What makes Polkadot (DOT) so special?

Polkadot (DOT)

Polkadot (DOT) has sometimes been hailed as a competitor to Ethereum. But what is behind this cryptocurrency?

Polkadot (DOT) is strongly supported by Ethereum co-founder Gavin Woods. The project has been committed to interoperability from the beginning. The project aims to bridge different cryptocurrencies and blockchains. Parachains play an important role in this effort.

Polkadot (DOT): Building Bridges with the Relay Chain

The basis for this project is the Relay Chain. This blockchain is the centerpiece of the Polkadot blockchain. It has interfaces, known as slots, that other networks can use to connect to Polkadot.

"Parachains" are used for this purpose. These can exchange data and assets within the network and connect to other external networks via bridges.

Polkadot thus creates a special flexibility. One of its goals is to solve the blockchain trilemma. This is the general difficulty of balancing scalability, security and decentralization.

However, the bridges already mentioned also make it possible to transfer Bitcoin to the Ethereum blockchain. This in turn makes it possible to use Bitcoin in the DeFi.

The network is secured with a proof-of-stake mechanism. There are monetary incentives to maintain the security of this consensus. Anyone who agrees to secure the network and in return deposits their DOT tokens into the network is paid additional tokens.

The DOT token and its role in the network

In addition to the stake functions already mentioned, the DOT token has other functions. It is also needed to create new blockchains and connect them to the relay chain. DOT is also a governance token. Therefore, it is also used to participate in decisions in the network.

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