Three Ways to Benefit from Polkadot’s Expanding Ecosystem
August 23 2021 - 7:57AM
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Sharded blockchain Polkadot recently set tongues wagging after
confirming the next batch of parachain auctions on its experimental
network Kusama. But as the crypto community waits with bated breath
for candidates to announce themselves, it’s worth remembering that
Polkadot is already alive and kicking in its own right. Founded by
Ethereum O.G. Dr Gavin Wood, Polkadot has long been touted as a
viable rival to the world’s best-known smart contract network, a
consequence of its sophisticated infrastructure, thriving developer
community, and promise of true interoperability between
applications running on separate chains. Already a top 10
cryptocurrency by market cap (DOT), the platform has been five
years in the making and ultimately aims to support a global network
of interoperable parachains and parathreads seamlessly
communicating with each other. In the near future, deploying on
Polkadot could be a no-brainer for savvy developers – both from a
cost and performance perspective. But that’s all for the future. In
the here and now, the flourishing Polkadot ecosystem is such that
users can take advantage of various opportunities whether their
interest lies in trading, gaming, building, privacy or IoT. Here
are three ways to leverage the Polkadot blockchain right now. Stake
DOT to Earn Yield Because Polkadot uses a Nominated Proof-of-Stake
(NPoS) algorithm, staking is integral to the security of the
network. In direct staking, you can either be a nominator, tasked
with nominating validator candidates whom you trust to help you
earn DOT rewards, or a validator, validating proofs from collators
and participating in consensus with other validators. In the case
of nominating directly on Polkadot, a minimum of 80 DOT tokens is
required – just over $2,000 worth at today’s prices. However,
because there is a maximum of 22,500 nominators, having sufficient
DOT tokens doesn’t actually guarantee you a staking berth. Setting
up a validator node on Polkadot is a little more complex as it
requires significant system administration experience. What’s more,
the minimum stake needed to be elected as an active validator is
dynamic and varies over time. The average returns Polkadot
validators can expect are in the range of 10%. If you find the idea
of direct staking a little daunting, there are alternative services
that allow you to participate. Binance, for example, lets you use
DOT for high-yield farming of new tokens on its Lauchpool; users
are also free to stake DOT in Binance Locked Staking to earn up to
31.49%. Kraken is another top-tier cryptocurrency exchange that
rolled out support for Polkadot staking last year, with yearly
rewards of 12%. Use Dot.Finance’s DeFi Suite Another great way to
maximize your DOT yields is to leverage DOT.Finance, a dedicated
DeFi aggregator for the entire Polkadot ecosystem. Rather than
simply staking DOT to earn a set percentage, DOT.Finance helps
users generate a better rate of return by employing innovative
yield optimization strategies across a swathe of DeFi dApps. The
cool thing about DOT.Finance is that its smart contracts
automatically compound your staking returns at the optimal
frequency to increase APY. In the words of the team, “it’s like
farming with a tractor instead of pulling a yoke on your
shoulders.” And it’ll soon get even better: in the near future,
DOT.Finance will allow users to hold Polkadot Index tokens,
enabling them to gain exposure to a variety of Polkadot-based
assets. Fly to the Moon(beam) The upcoming Moonbeam launch on
Polkadot presents yet another opportunity to earn. Moonbeam, for
the uninitiated, is a brand-new Ethereum-compatible smart contract
platform that simplifies the process of building natively
interoperable decentralized applications. Moonbeam’s Take Flight
token event gets underway on September 7 and aims to thank the
Moonbeam community for its continued support by dispensing 80
million Glimmer (GLMR) tokens during three rounds, all of which
require a whitelist to participate (register here). While the early
access round is specifically geared towards key project supporters
(Moonriver crowdloan participants, PolkaPet holders, etc), the
second is much more open: if you’re a member of the Telegram
channel or Discord server, you’re pretty much good to go. One nifty
condition of Take Flight is the low contribution threshold, meaning
everyday investors get the same opportunity to earn as major
bag-holders. The three staggered rounds should also ensure a wide
cross-section of participants, all of whom will have a stake in the
Moonbeam Network’s success. Well, there you have it: three solid
options for those looking to leverage Polkadot before a single
parachain has launched. You’re welcome.
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