- Ahead of the August 21 deadline, Polkadot is on a mission to educate its community about the change, and the adjustment this will entail for the ticker associated with its native token.
- DOT (old) will give way to New DOT, resulting in holders seeing their balance increase 100-fold, but the value of their holdings remain unchanged.
Polkadot has set August 21 as the date when all DOTs will be redenominated, making each new token 100x smaller than the original. The change won’t affect the value of users’ DOT holdings: it will simply make DOT denomination smaller, which for pricing purposes will make life easier for network users. To use an analogy, it will be like paying for a soda with a $20 bill instead of $100. Less messy, and easier to track.
Ahead of the August 21 deadline, Polkadot is on a mission to educate its community about the change, and the adjustment this will entail for the ticker associated with its native token. DOT (old) will give way to New DOT, resulting in holders seeing their balance increase 100-fold, but the value of their holdings remain unchanged.
Redenomination Comes to Crypto
Monetary redenomination is usually synonymous with countries whose currency has undergone hyperinflation. In nations like Zimbabwe, for instance, notes have been recalled by the central bank and stamped with a lower value to prevent the need to transact in billions and trillions. Polkadot has not suffered the same problem, although its DOT token has multiplied in value by 12x since its 2017 ICO. DOTs are currently trading for around $360.
As Polkadot reaches a critical stage in its development, interest in its heterogeneous blockchain ecosystem is at an all-time high. The desire for Polkadot to reach a production-ready state has also been fueled by record Ethereum gas fees, which are now over 250 gwei, resulting in simple DEX trades costing over $15 and rendering defi unsuitable for anything other than speculative trading.
Polkadot Crosses the I’s and Tees up the Dots
Denomination Day on August 21 will not require any active participation from the Polkadot community: the transition will kick in at block 1,248,328, whereupon the change will be automatically implemented. However, there is a need for exchanges and other platforms to update their interface to display the new denomination for DOTs. Although not officially tradable, DOT futures or “IOUs” are available on a number of CEXs including FTX.
The base unit of a DOT is known as a Planck, and is comparable to the smallest unit of bitcoin – a satoshi or “sat.” New DOTs will have 10 decimal places, compared to the 12 of old DOTs. These changes won’t be noticed by most users, but they’ll be important to developers building on Polkadot and its Substrate framework.
A vibrant ecosystem is already beginning to form around Polkadot, including projects focused on defi, oracles, smart contracts, blockchain explorer tools, wallets, and validators. Investor interest in new Polkadot projects has been particularly keen as everyone zeroes in on “the next Ethereum.” Polkadot isn’t on a mission to directly compete with Ethereum; rather it will complement it and connect to it. Before this can happen, however, there is still development work to be done, starting with Denomination Day on August 21.