DOT is Finally Coming to Polkadot: Why XCM is a Huge Leap for Blockchain Interoperability
Finally, the highly-anticipated launch of Polkadot’s ground-breaking technology — called Cross-Consensus Messaging (XCM) is just around the corner! 🎆 With the launch of XCM, Polkadot’s native coin — called DOT — will finally be ready to be traded, sent and composed across all parachains on the Polkadot network.
What this means is that you’ll finally be able to trade and stake your DOT on StellaSwap, which is the leading DEX on Moonbeam network! 🔥
DOT Farm Launch Details
The DOT that will be launched on Moonbeam is called xcDOT.
XC-20s are a unique asset class on Moonbeam. It combines the power of Substrate assets (native interoperability) but allows users and developers to interact with them through a familiar ERC-20 interface via a precompile contract (Ethereum API) — XC-20s & Cross-Chain Asset Overview by Moonbeam
The details of DOT farm launch on StellaSwap is as follows:
- Farms that will Launch: xcDOT-GLMR
- Farms Open for Deposit: 4 May, 16:00 PM UTC
- Farm Rewards go Live: 5 May, 16:00 PM UTC
- Reward Tokens: STELLA & GLMR
- Bridge: None! Feel the power of bridgeless transfers on Polkadot 😎
- Monthly Rewards: North of $150,000
DOT is Finally Coming to Polkadot. Why the Delay?
Before the launch of XCM, the utility for native DOT usage is limited to crowdloan contributions for aspiring parachains auctions. In order for parachains to go live on Polkadot, they need to garner support from the community by going through an auction for leasing a spot on the network. The more crowdloans that a parachain garners, the higher the probability that it wins a parachain slot. The underlying DOT provided by investors to a crowdloan is locked for the entire duration of the ‘lease’, which amounts to around 2 years. In return, investors get an allocation of the underlying tokens of the parachain.
Beyond crowdloans, it didn’t make sense for DOT to be available on the network until XCM is launched. This is because XCM unlocks a core premise of the huge potential of Polkadot: Interoperability.
Why XCM is a Huge Leap for Blockchain Interoperability
In order to understand the potential of XCM, understand that a major limitation of blockchain networks is interoperability; this means that it is hard for a blockchain to interact with another blockchain as they are made differently. For example, it is hard for Ethereum blockchain to interact with Ripple network. You can therefore imagine that each blockchain network is a silo on its own, and the lack of interoperability across networks inhibits on the potential of blockchain networks and shifts dependencies towards centralized bridging solutions for value transfers. You might ask, what are the benefits of an interoperability?
#1: Greater Decentralization
Having numerous application-specific blockchains that communicates with each another through a decentralized main hub leads to greater efficacy, as specialized blockchain networks can instead focus on their business logic rather than the underlying security infrastructure. That’s how Polkadot was designed. Additionally, having a universal framework for interacting between different network reduces the dependencies on current bridging solutions, which are often centralized. Lots of bridging hacks have occurred, resulting in hundreds of millions of dollars in lost funds.
#2: Creating More Powerful Products that Streamlines Complex User Experience
Composability; that’s a powerful concept in DeFi that allows the creation of products and services by simply combining various interoperable components to create greater value, just like lego blocks. Right now, composability is limited to blockchain-specific networks like Yearn finance on Ethereum.
#3: Enhanced Cross-Chain Collaboration
Interoperability across organizations, dApps and communities that wouldn’t typically interact with one another would be able to exchange information, leverage each other’s strengths, and cultivate innovation more effortlessly and effectively.
Polkadot represents a networks of heterogenous parachains connected to a decentralized single main chain — caleld the Relay Chain — where security, finality, and communication is shared while the parachains is free to focus on what matters to them; their specialized business logic.
XCM is the technology framework that allows interoperability of blockchain networks, where messages across different parachains can be passed seamlessly and in a decentralized manner.
StellaSwap is the first and leading Moonbeam DEX that offers an integrated gateway to the DeFi world. Users can swap, earn, yield farm, bridge assets, explore new projects and engage in NFT trading all from a single unified platform. StellaSwap’s products are structured in such a way that facilitates decentralized governance of STELLA holders, while continuing to innovate on the collective foundations by design.