Polkadot hardly needs any introduction within the crypto space, especially in the DeFi market. In simple terms, Polkadot is a protocol that connects blockchains.
This way, it allows blockchains like Bitcoin and Ethereum, which were previously incompatible, to share data. In this article, you will discover DOT use cases and a new way to stake it.
DOT Use Cases
The DOT token, Polkadot’s native token, plays a huge role within the protocol. First, DOT is a governance token. This means that it enables holders to have a say in the future of the Polkadot ecosystem.
Secondly, DOT can be staked. Staking is a widely used term in DeFi. It simply means locking your crypto assets for a set period of time to support the activities of a blockchain. So, in return for staking your crypto, the network rewards you with more cryptocurrency as a reward.
So, you can stake DOT to earn rewards. Unlike Bitcoin, which uses a proof-of-work mechanism. DOT holders can interact with Polkadot’s staking system in different ways. But this depends on several factors, such as time, technical expertise, and how much they choose to invest.
Want to learn more about #tokenomics?
Let's explore it with the @Polkadot use case.
— Polkastarter (@polkastarter) May 28, 2022
How to Stake DOT
There are two important concepts you should know to stake Polkadot’s token:
- Validators: These groups of users do the most work since it requires a great deal of technical expertise. In addition, being a validator is time-consuming. Polkadot’s validators have to maintain a node with minimal or no downtime and stake a sizeable portion of their own DOT.
But the reward makes the process worth it. In return for their work, validators have the ability to approve valid transactions, add new “blocks” of transactions to the relay chain, and receive a portion of transaction fees. But there are some risks that come with this job. You can lose all or a portion of your staked DOT if you act deliberately, make a mistake, or experience technical issues.
- Nominators: These are those who enable regular investors to indirectly engage in staking. They can assign a portion of their DOT to a validator they know will follow the rules. So, in return, they will receive a portion of the DOT that their selected validators earn. There are also some risks involved if you fail to choose the right validator. So, if your validator violates the rules, you could lose some of your staked DOT.
Looking for decentralized, self-custody $DOT staking with strong and consistent rewards?
— Acala (@AcalaNetwork) July 18, 2023
Additionally, there are two other positions that you can take on to stake in Polkadot. These roles often demand less dedication than serving as a complete validator but greater technical proficiency than a nominator. Firstly, there are the collators. They keep track of legitimate parachain transactions and get them to relay chain validators. Secondly, the fishermen aid in identifying and reporting inappropriate behavior across the network.
4 Ways to stake DOT
The easiest way to stake DOT is through:
- A cryptocurrency exchange.
- A hardware wallet.
- Polkadot.js user interface
- The Polkadot app.
For this article, we want to show you how to stake using the Nova wallet app, especially with the new update. Nova is a user-friendly crypto wallet for both experienced and new users. The new v7.0.0 update for both iOS and Android features a series of staking improvements.
Staking has never been easier thanks to @NovaWalletApp's latest update!
1⃣ Select a token (DOT, KSM, AZERO, GLMR and more)
2⃣ Input the # of tokens you want to stake
3⃣ Sign the transaction
Start staking with as little as 1 DOT.
Learn more about the latest update https://t.co/MoyI2zVuiM
— Polkadot (@Polkadot) September 17, 2023
You can now start staking with as little as 1 DOT directly on-chain. There are no added fees or commissions attached to the process. The process is pretty simple:
- Select a token.
- Input the number of tokens you want to stake.
- Sign the transaction.
With staking DOT now simpler than ever, we could see an influx of users within the Polkadot ecosystem.
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