Today, Coin98 will show you how to:
- Purchase and store DOT.
- Transfer funds to Polkadot blockchain by transferring DOT coins from an exchange (CEX) or using a cross-chain bridge.
- Seek Investment Opportunities on Polkadot.
Let's jump right into the Polkadot blockchain!
Polkadot allows blockchains to connect with each other to share data and form a decentralized network. If chains like Ethereum, Solana, Polygon are layer 1 platforms, then Polkadot can be understood as a layer 0 platform that connects layer 1 platforms.
Polkadot's vision is to create a "Decentralized Web - Decentralized Network". Polkadot focuses on solving two main problems of Blockchain: Interoperability and Scalability.
Similar to other blockchains, to participate in DeFi on Polkadot, you also need the native token of the corresponding chain for a fee, also known as "gas fee" (the fee you need to pay to the network). The gas gwei level on the Polkadot blockchain is currently around $0.6 - $0.7/transaction. So, to make transactions, only 1 DOT ($13.5) can go a long way.
Step 1: Prepare tokens
Since nearly all CEXs currently support DOT, you have complete freedom to choose where to make your DOT purchase(s). The most popular Polkadot-supported exchanges include Binance, Huobi, Gate.io, etc.
In the following section, I'll go into greater detail about which exchange you should use to purchase DOT.
Step 2: Prepare your Polkadot wallet to store tokens
It is necessary to have a non-custodial wallet after you buy tokens on CEXs to store tokens and interact with DeFi. At this time, many different wallets, including the Coin98 Super App, can store DOT coins.
First, you should have an Polkadot Wallet to store your DOT, this article will be usefull for you: How to create & use Polkadot Wallet
Following these simple steps, you can store DOT on Coin98 Wallet.
- Step 1: Click on a Polkadot wallet on the main screen.
- Step 2: Select "Receive."
- Step 3: Copy the wallet address or scan the QR code address and send your assets to this address
Step 3: Transfer tokens from other Blockchains to Polkadot Blockchain
After buying DOT and having a Polkadot wallet, you can participate in events or skin in the game in the Polkadot Ecosystem, such as joining lending, yield farming or staking activities on this chain.
Currently, there are two ways to transfer assets from one chain to another, but the Polkadot blockchain has not officially released its cross-chain bridge yet. Therefore, the easiest and most convenient way is to buy DOT from CEXs and transfer them to a Polkadot-supported wallet.
To make it easier for you to visualize, I'll walk you through the process for the method mentioned above.
Transfer and withdrawal fees will vary depending on the exchange. If you want to transfer your assets, you should pick the CEX that is most convenient for you to use. I'll recommend a few exchanges here, such as Gate, Binance, KuCoin etc.
To begin, you'll need USDT or USDC stablecoins in order to purchase DOT. US dollars (USD) or other currencies in your country can be used to buy USDT if you don't have stablecoin yet.
Step 1: Login to the Binance Mobile App. I recommend reading this “How to use Binance'' article.
Step 2: Choose “P2P Trading” in your Binance Homepage.
Step 3: In this step, you will see:
- Number 2 indicates which fiat currency you have now to buy USDT.
- Number 3 indicates which token you want to buy (e.g. USDT, BTC, BUSD, etc.).
- Number 4 displays a list of sellers who will sell you USDT in exchange for your fiat currency.
After you've decided on your preferred sellers, simply follow the Binance instructions to complete the transaction (Remember to read the instructions carefully).
Now that you have USDT, you can purchase DOT from any exchange, such as Binance, Kucoin, Gate, etc. and transfer the tokens to the Coin98 Wallet by doing as follows:
- Step 1: On Binance exchange, use USDT to purchase DOT.
- Step 2: Transfer DOT to the Polkadot wallet by typing in your Coin98 wallet address.
Step 4: Add tokens to Coin98 Super App
Because DOT is the native token of the Polkadot blockchain, it will be displayed by default in multi-chain wallets. Note that the Polkadot wallet only supports storing DOT and other tokens belonging to the Polkadot blockchain. Therefore, do NOT transfer any other coins to the Polkadot wallet to avoid fund losses.
Step 5: Transfer DOT from Coin98 Super App
To transfer tokens from a decentralized wallet to another, follow these simple steps. I'll show you how to transfer DOT from your mobile wallet.
Step 1: Click the Polkadot wallet.
Step 2: Choose Send.
Step 3: Select the token, the number of tokens you want to send & the wallet address to send to. Adjust the Gas fee slider to suit your needs → Slide the Send bar to confirm.
In addition, you can also go to the Send section in the main interface, select the Polkadot wallet you want to send from.
- The gas fee for each transaction is paid with DOT, approximately 0.016 DOT.
- The default gas fee on the Coin98 Super App has been set at the standard rate that offers the most optimized speed at a reasonable cost.
Step 6: Skin in the game with Polkadot Ecosystem
Polkadot will have a thrilling year in 2022, as the parachains in this ecosystem begin to fill in the gaps from missing sectors of dApps. Keeping an eye on these ecosystems will give you many opportunities to skin in Polkadot, as you will be aware of the most recent changes in each network.
Learn more: Polkadot Ecocosystem - Move Slowly but Surely
Disclaimer: The information in this article is provided solely for informational purposes and should NOT be considered as investment advice. Investing in cryptocurrencies involves a high level of risk, and you should only invest what you are willing to lose.
Staking is a process that involves committing your crypto assets to support a blockchain network and confirming transactions.
Currently, you can stake your DOT to earn passive income with an APY ranging from 11% to 17%. I will suggest some places for you to stake your DOT as follows:
Acala Network is a layer-1 smart contract platform that's scalable, Ethereum compatible, and optimized for DeFi with built-in liquidity. Acala aims to be the decentralized finance network and liquidity hub of Polkadot.
On Acala, there is a Homa Protocol, which is a staking protocol that provides a non-custodial trustless and cross-chain staking protocol, where users stake their token and receive back L-tokens. The L-Token will present the principle staked asset + the staking yield continuously accruing.
Example: Stake DOT to the Acala and receive back L-DOT.
2. Parallel Finance
Parallel Finance is a network built to accelerate liquidity & adoption on the Polkadot network.
Parallel proposes two solutions to circumvent the limitations: delegated staking, and a lending pool with a bounded rate. Users can deposit DOT and receive liquid tokens (sDOT) in return.
Because Polkadot combines multiple parachains with different functionalities, you need to have a base knowledge of this layer 0 chain before engaging in any DeFi activity on this chain. So if you're interested in learning more about Polkadot and the investment opportunities it offers, I recommend checking out this article. Hopefully, this will be beneficial to you!
So far, I've shown you how to transfer coins to the Polkadot blockchain in order to skin in the game.
Hopefully, after reading this article, you will have a better understanding of the DeFi market and find the suitable ways to maximize your profits.