How do I pin polkadot (DOT)?

How do I pin polkadot (DOT)?

Polkadot is one of the most exciting blockchain projects right now – its mainnet only launched last year and it already has one of the most engaged and active communities in space. The DOT token currently has a market capitalization of over $ 20 billion, making it the sixth largest crypto asset on the market.

Polkadot offers a secure and powerful platform on which different blockchains can work together. Developers can create custom blockchains called “parachutes” and connect them to the relay chain. This offers a much higher level of security and interoperability than creating a blockchain that exists as its own separate platform. Parachutes connected to Polkadot can also communicate with other blockchain networks such as Bitcoin via “bridges”.

The Polkadot network reaches consensus through a nominated proof-of-stake consensus model (NpoS). In this handbook we will show you how you can participate as a nominator in the Polkadot network and receive bonuses in return.

Please note that due to the current technical limitations of Polkadot, there is a certain minimum DOT balance that you have to use if you want to receive bonuses. While this minimum balance changes depending on network conditions, it is currently around 200 DOT. If you want to deploy less than 200 DOT, you can deploy that instead through a central service like a cryptocurrency exchange. Some exchanges that currently support DOT staking are Binance and Kraken.

For more information on the current restrictions, check out this official blog post. Polkadot developers are working to fix the issue to make the insert more accessible to all owners. We hope that a fix will be provided soon as cryptocurrency users should rely as little as possible on centralized services like exchanges.

What is a polkadot nominator and why would you like to become one?

The Polkadot network is managed by validators who are actually involved in the production of new blocks and add them to the blockchain. However, the number of validators that can be active on the Polkadot network at any given time is actively limited.

The amount of currently active validators is determined by the amount of DOT they are using. In other words, there is always a threshold for the minimum amount of DOT that a validation candidate must employ in order to be part of the active validator set. The entity trying to run a validator may not have the required amount of DOT to become part of the active validator set.

This is where nominators come in – nominators can help validators reach this threshold by lending their stake. In return, the validator shares a portion of the block rewards that it collects with its nominators. Anyone who owns DOT can participate as a nominator.

There are several reasons one might want to become a Polkadot nominator. The first reason is very simple: if you already hold DOT and plan to keep the tokens for an extended period of time, as a nominator you can earn wagering rewards and increase your inventory. The second main reason you’d want to become a nominator is to protect your DOT investment from inflation. DOT is an inflationary asset as new DOT tokens are constantly being generated to compensate validators. By earning block rewards yourself, you can effectively negate the impact of these inflationary pressures on the value of your DOT holdings.

This is, of course, a very close-to-the-surface overview of the Polkadot pegging mechanism. A detailed explanation can be found in the Polkadot Wiki.

Create your Polkadot accounts.

For the purposes of this guide we assume that you already have a sufficient amount of DOT. If you don’t, you can buy DOT on Binance or other cryptocurrency exchanges.

There are many different ways to create a Polkadot account. In our guide we use the most accessible and easy to use option, which is the Polkadot {.js} browser plugin. If you’re an Ethereum user familiar with MetaMask, you probably won’t have too many problems getting used to the Polkadot {.js} extension. The extension can be installed in the Google Chrome and Firefox web browsers.

To be a nominator for Polkadot, it is recommended that you create two separate accounts – one serves as a Hide Account and the other will serve as that Regulator Account. To create these accounts, proceed as you would any other Polkadot account. If you want to be more organized, you can label them separately so you can instantly tell which account is which.

Note that every Polkadot account must have a balance of at least 1 DOT in order to interact with the blockchain. If any of your accounts have less than 1 POINT you will need to top up them before you can use them. It is recommended that you keep around 1.5 DOT in an account that you use.

IMPORTANT: When creating a Polkadot account via the Polkadot {.js} plugin, make sure to securely backup your automatically generated 12 word seed. Do not share this seed with anyone.

Tie your tokens

Now that you’ve created your stash and controller accounts, it’s time to connect your tokens. You can do this through the Polkadot JS user interface. Go to the “Network” tab and find the “Stake Out” section. Here you will find useful information about the Polkadot staking ecosystem, including a list of active validators and detailed statistics on their performance.

To bind your DOT tokens and earn stake awards, go to the “Account Actions” subsection and click the “+ Nominator” button.

Here you can choose the account you want to use as the stash account and the account you want to use as the controller account. In the “Value Bonded” field, select how much DOT you would like to place. Do not use all of the available DOT tokens as you will have to leave some tokens behind to pay the transaction fees.

In the “Payment term” window you can select where you would like to receive payouts from the stake. If you choose the first option – save account (increase the amount at stake) the payouts will be wagered again and you will effectively earn compound interest on your wagered tokens. This is the option that is likely to work for most users. However, you can choose the option you want if you have specific needs.

Now you can choose up to 16 validators to nominate. Among other things, you can decide which Validators to nominate by looking in the Stakeout section of the Objectives tab to see which Validators are likely to generate the highest returns. Whenever possible, do a little research on the validators you’ve chosen to make sure they’re trustworthy. You can reduce the risk of choosing an untrustworthy validator by naming multiple validators.

After you have selected the validators you want to nominate, all you have to do is click on “Bond & Nominate”. Congratulations, you are now putting DOT! Assuming you have wagered a sufficient amount of DOT, your first wagering reward will be paid into your account in the next Polkadot era. An era on Polkadot lasts 24 hours. At the end of each era, the active validators are updated and the bonuses paid out.

What if you want to stop betting?

The downside to using it is that you cannot use your tokens for any other purpose while they are in use. If you want to remove your tokens or solve in Polkadot words, please check out the following article on the Polkadot Wiki, a very useful resource for anything related to Polkadot.