Polkadot’s so-called Denomination Day is looming. On Friday August 21, DOT, the native asset of the Polkadot ecosystem, will be redenominated, reducing its size by 100x. The change will not affect the value of users’ DOT holdings. The balance of tokens in their wallet will increase by 100x, resulting in the same monetary value. The exercise is being undertaken to convert DOTs into smaller units that are easier to reconcile when transacting.
At block number 1,248,328, New DOT will become the standard unit of account on Polkadot, replacing DOT (old). Holders who wake up and check their wallet balance shouldn’t have anything to fear, however: the change won’t deleteriously affect them. Nevertheless, Polkadot has embarked on a publicity blitz ahead of the event to ensure its community knows what to expect.
DOT Does a 100x
Redenomination of a currency, to change its face value to a lower multiple, is synonymous with countries hit by hyperinflation. It’s a rare occurrence in the crypto world though. In Polkadot’s case, the change is being implemented for practical purposes. If the value of a token becomes too large in dollar terms, it complicates fee calculations and sending payments. Reducing the token value by 100x will make it easier for network users to price services in DOTs rather than in minute fractions of a DOT – or Plancks as they’re known.
The New DOT tokens will have 10 decimal places whereas DOT (old) has 12. In every other respect, though, the tokens have the same function within the DOT ecosystem. Denomination Day will require the cooperation of exchanges where the asset is listed, including Kraken, which added the token on August 18. DOT is also available on FTX.com, where it trades as a perpetual contract.
Polkadot’s Empire Expands
Expectations are high for Polkadot’s fortunes in the year ahead. With its network of heterogeneous blockchains now coming onstream, projects built upon its Substrate framework are beginning to launch. PolkaProjects, which catalogs all of the teams building on Polkadot, lists close to 200 projects. These include Sora, a decentralized autonomous economy chain, and Keysians Network, which is designed for maximizing efficiency of consensus between blockchains and boosting on-chain application usage. In addition, there are teams working to develop Polkadot wallet, blockchain explorers, toolkits, staking services, and educational services.
The development of complementary services such as these will be the key to coaxing the crypto community away from Ethereum and into the new world Polkadot is building. Thanks to cross-chain compatibility, the two ecosystems will be able to co-exist, providing incentives for developers and users to take the plunge and see what Polkadot has to offer.