Polkadot

Layer 1 Protocol, Polkadot Ecosystem

Overview

Polkadot is an interoperability network allowing interacting protocols to benefit from a shared security environment. The protocol was created by Gavin Wood, an architect of the Ethereum chain, who found the need to abstract aware execution and settlement environment. It is maintained by Parity, the Web3 Foundation, and the community of Polkadot users.
The chain is often referred to as a ‘metaprotocol’ - a protocol on which other protocols can operate. It facilitates a settlement environment that creates an ease of experience for projects that choose to execute within the Polkadot ecosystem via secure cross-chain message passing (XCMP) between chains and secured consensus on behalf of the validators that verify transactions for connected chains. Because of this, the terminology used within the Polkadot community is that the relay chain is a ‘Layer 0’ protocol.

Staking Information

APY
~14 %
Total Supply
Inflationary
Compounding
Manual (Figment will trigger rewards but user has to restake)
Compounding Frequency
At the end of the lock up period
Reward Distribution Period (Payout Frequency)
Each Era (about 24 hours)
Unbonding Period
28 Days
Delegation Requirements (Min-Max)
min. 10 DOT
Validator Self-Bond Requirement
The minimum necessary self-bond to be elected as an active validator is dynamic and can change over time. It depends not only on how much stake is being put behind each validator, but also the size of the active set and how many validators are waiting in the pool.
Figment Validator Addresses
138QdRbUTB9eNY94Q4Mj5r39FkgMiyHCAy8UFMNA5gvtrfSB
12NEHw7QgwX61xGe9kahhVqMGCi6MY8fq6iBcwNJvj3Y7Nwj
148TcjWBiBQT4oYE6EGY4Q94242sFnaG4g1gogJhe2Yhiz8N 16a4Q1iudXznPBx3CzJRaxXtYNenzGAZXdBZZkc5KrNxLXFP
Recommended Wallet

Slashing Information

Unresponsiveness
Failure to produce block in 4 hours
GRANDPA Equivocation
Signing 2 or more votes in same round on different chains
BABE Equivocation
Producing 2 or more blocks on Relay Chain in same time slot
Additional details on slashing risk can be found here.

Staking Guide

See Staking Guide here

This is Figment' guide to staking and nominating Polkadot DOTs

Note that unstaking takes 28 days. You will need:
  1. 1.
    If you participated in the crowdsale, you'll need control of the Ethereum address you used to purchase DOTs or control of an account that has claimed DOTs (optional)
  2. 2.
    Chrome or Brave web browser
  3. 3.
    The address of the validator(s) you are nominating
Figment validator addresses:
138QdRbUTB9eNY94Q4Mj5r39FkgMiyHCAy8UFMNA5gvtrfSB
12NEHw7QgwX61xGe9kahhVqMGCi6MY8fq6iBcwNJvj3Y7Nwj
148TcjWBiBQT4oYE6EGY4Q94242sFnaG4g1gogJhe2Yhiz8N
16a4Q1iudXznPBx3CzJRaxXtYNenzGAZXdBZZkc5KrNxLXFP

Guide to Staking and Nominating

Begin by using either the Chrome or Brave web browser, and install the Polkadot{.js} browser extension. Head to https://polkadot.js.org/apps and select 'settings' in the left vertical toolbar to ensure you are on the Polkadot network (since this web app can be used to connect to several other networks, such as Kusama).
staking polkadot
There are different kinds of accounts, but you'll only need to create a stash account by clicking 'Accounts' in the left menu bar. This new account will be used to store and control your funds. Ensure that you back up your seed phrase by writing it down on paper--anyone that controls this seed phrase will also control your funds.
If you haven't already, you can claim your DOTs with this interface.
After you have claimed your DOTs, click 'Staking' in the menu bar on the left side, then 'Account actions' in the top menu. Click the 'Nominator' button on the right side.
There are two steps to nominating your validator(s). The first is to decide how many DOTs you're prepared to stake and also where your rewards should go (if you prefer that they go to a different account).
The next step is to indicate the validator(s) you want to nominate. Currently you will need to search for the addresses below to find the Figment validators. (Nominating to all 4 of Figments validators below gives the best chance of rewards)
138QdRbUTB9eNY94Q4Mj5r39FkgMiyHCAy8UFMNA5gvtrfSB
12NEHw7QgwX61xGe9kahhVqMGCi6MY8fq6iBcwNJvj3Y7Nwj
148TcjWBiBQT4oYE6EGY4Q94242sFnaG4g1gogJhe2Yhiz8N
16a4Q1iudXznPBx3CzJRaxXtYNenzGAZXdBZZkc5KrNxLXFP
Then click the 'Bond & Nominate' button to nominate Figment.
Authorize the transaction by clicking the 'Sign and Submit' button.
Finally, you'll receive a pop-up dialogue from the web browser extension. Enter your password and sign the transaction.
That's it! Now you'll need to wait until the validator is elected before you begin earning, which shouldn't be long. Only the top 197 validators are active and earning, and we expect a total of 1000 validators to be active by November.
You can watch your payouts here: https://polkadot.js.org/apps/#/staking/payout
For reference, a nominator must send a claim transaction once every 84 days, but only one nominator has to do this for all nominators to get paid. Claims older than 84 days will fail. Figment will be responsible for executing Polkadot payouts each month, so you will not have to make any claims.
Please reach out to [email protected] if you plan to stake more than 1 Million USD in DOT tokens.

Governance Overview

Polkadot has implemented an advanced governance mechanism that enables the community of token holders to change nearly everything about the protocol. Changes are effected through stake-weighted governance proposals. Polkadot combines an amorphous state-transition model (on-chain) with on-chain voting mechanisms (referenda) with adaptive super-majority thresholds and batch approval voting.

Ecosystem Overview

Since Polkadot launched its parachain auctions its ecosystem added attracted a number of projects that are looking to leverage the technology, notably the ultra-efficient architecture to ensure security and fast transactions (clocked at up to 1,000 per second). Well known projects in the Polkadot ecosystem are Kusama, Acala and Polkadex.

FAQs

Polkadot FAQs
What is staking?
On a Proof of Stake blockchain, staking is the act of depositing tokens in order to become a validator; that is, to participate in proposing and attesting to transaction blocks. Anyone with a minimum necessary coin balance can validate transactions and earn staking rewards on these blockchains.
What is the name of the asset being staked?
Polkadot's native token, DOT, is used to stake, pay transaction fees, and to participate in on-chain governance.
Where can I explore the network and create a Polkadot wallet?
Explorer: Polkadot{.js} or Subscan
Figment has developed the Polkadot Hubble explorer.
Why Stake DOT?
Initially, DOT is being staked to earn new issuance ("inflationary") subsidies. It means that the supply of DOT will increase and stakers will capture the newly issued DOT. Generally, you will earn around 14% annually on your staked DOT, but it is subject to change.
Stakers will also capture fees from network transactions, and as Polkadot transaction volume increases, DOT stakers will earn more than just new issuance subsidies. DOT also gives stakers the right to vote on policy decisions on how the Polkadot protocol will operate and distribute treasury funds.
The main drivers of the DOT's value could be more than transaction fees. Since DOT is required to lock up in parachain bidding, a new side chain will be required to procure and lock these DOT tokens in competition with other side chains. DOT-holders are also expected to be able to get early exposure to the assets of new side chains by lending their DOT for this bidding process.
Owning staked DOT is ownership of the Polkadot network, making DOT stakers entitled to setting/changing the rules of the Polkadot protocol.
How long does it take to stake and unstake?
From the moment you initiate the unbonding process, it takes 28 days to unstake. During this time you will not earn rewards. When the process is complete, you can transfer/trade your DOT tokens.
When are staking rewards and transfers enabled?
Staking rewards have been enabled with the launch of the Polkadot mainnet on May 26th 2020.
How is staking income disbursed? Is staking income liquid or automatically staked?
Once triggered, staking income on Polkadot may be automatically distributed every era (ie. 24 hours). Figment is never in control of your rewards. However, you will not receive your staking income until a claims transaction is sent, which any nominator may do every 24 hours. Staking income is not staked automatically, which means you will need to lock and nominate with your staking income in order to compound your rewards.
Can I lose potential staking rewards?
Your potential rewards depend upon validator performance. When your validator is down, you will not be earning staking income. If your validator is not performant, your staking income will be reduced.
Can my staked DOT be slashed (seized or destroyed)?
Yes, a portion of your staked DOT can be destroyed if the validator(s) you nominate are involved with too much stake going offline simultaneously or equivocation events (aka double-signing).
There are three ways this can happen:
Unresponsiveness - Failure to produce block in 4 hours
GRANDPA Equivocation - Signing 2 or more votes in same round on different chains
Babe Equivocation - Producing 2 or more blocks on Relay Chain in same time slot
Validators will be slashed a fixed percentage of their stake and not a fixed amount of DOTs. This means that more DOTs will be slashed from validators with a higher stake. This further incentivizes nominators to choose validators with a lower stake. Further details are available here.
Figment insures our clients from slashing and has never had a slashing event.
What is the rate of new issuance (aka "annual inflation") for DOT? How does the token supply change?
The annual new issuance ("inflation") rate is around 10% of the total supply.
What affects future yields?
Future yields at Polkadot are affected by the percentage of total DOT token supply staked. The more DOT that is staked the lower the inflation and the reward rate will be (see graphic). For more information see this page.
Do I maintain custody of my DOT tokens? Who or what controls my staked DOT token?
Figment has partnerships with a number of top-in-class custodians. Please contact [email protected] for more inquiries.
The Polkadot protocol takes control of your DOT tokens while you are staking. If you unbond your tokens, this process will take 28 days before the protocol returns your tokens to you. While your DOT tokens are staked, you may participate in on-chain governance by voting on different proposals.
How are decisions about the Polkadot protocol made and executed?
Polkadot uses token voting for on-chain governance. Governance proposals are discussed on the forum.

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