Unlocking DOT Opportunities: Staking, Crowdloans, and More

Around two years ago, the first Polkadot parachain↗ slots were secured with the help of crowdloans↗, a way for DOT holders to support their favorite parachain projects and get rewarded in return, typically with the project’s native token. With the two-year lease period for Polkadot’s first parachains now coming to a close, early crowdloan contributors are set to have their DOT contributions unlocked and free for use.

With this in mind, and as crowdloan contributors consider what to do with their newly unlocked DOT, let’s take a look at token utility and the different ways DOT can be used in the Polkadot ecosystem. From helping secure Polkadot’s Nominated-Proof-of-Stake (NPoS↗) system to participating in governance, dapps, and crowdloans, Polkadot’s native token has a number of uses that support the network and offer benefits in return.

Four common uses for DOT. *Solutions are currently under development to enable easy use of DOT across all ecosystem dapps Staking# Staking DOT natively↗ serves a dual purpose: it helps protect Polkadot from malicious attacks while also supporting the network’s decentralization. Staking on Polkadot also enables DOT holders to collect staking rewards for their service of helping secure the network.

Stakers in Polkadot’s NPoS system are called nominators because they nominate validators to secure the network. Validators play a more technical role of securing the network and participating in consensus and block production.

There are several ways to stake on Polkadot. Native staking, which means staking directly on Polkadot without going through an intermediary, enables you to stay in full control of your DOT and has benefits for the network in terms of security and decentralization. The easiest way to stake natively is to join a nomination pool. DOT holders can join a nomination pool with as little as 1 DOT, and get a more passive staking experience, as they don’t need to select their own validators, monitor validator performance, or regularly update their nominations.