Thread by @xpnp404

(1/24) Things you understand wrong about $DOT

Collected the questions from #DotSama community
• Wen Burn ?
• Why VCs choose to hold?
• What is Kusama?

🧵 to explain, get gud at @Polkadot

(2/24) "DOT has too many VCs"
According to @messari report, it indicated that DOT is the most held crypto among VCs and Hedge Funds.

Do you see this as Bearish, or Bullish?
Do you consider them smart money?..

(3/24) Traditionally, VCs, and Hedge Funds have their own analyst team to evaluate the project they are going to invest in.

👉 They did agree to hold DOT as a part of their portfolios.

Let's discuss about fundamentals, and some ideas on why would big boys hold DOT..

(4/24)

Interoperability Narrative:
Each cycle has its narrative, Last one was Layer 1

What if the next will be Layer 0?
Which one will be the first to pop into people's mind?

🔴 DOT
• Highest Market Cap in field
• Active developers
• Trusted team
• Sustainable system..

(5/24) Market Cap
At the time of writing, DOT marketcap rank is 11th. Pain in the eyes but it's ranked below DOGE. 🦮

DOT has been moving around within top 20 in the past months..

(6/24) Highest Active developers, plus:

1. Parachain teams keep deploying into Polkadot ecosystem.
2. Web3 Foundation has granted fund more than 400 grants and counting to grow the ecosystem.
3. Polkadot Treasury has rewarded contributors to the ecosystem..

(7/24) Trusted team from Blockchain Community:

As we know Gavin Wood (@gavofyork) is a co-founder and CTO of Ethereum.

Practically, he could stay working in Ethereum foundation, but he quit as he did see Ethereum's scalability will be a problem.

ps. He is Solidity creator..

(8/24) Sustainable ecosystem :

1. XCM, the trustless bridge allowing user to transfer assets between networks w/o bridge risk.
2. Forkless upgrade by upgrading the logic stored on-chain, and removes the requirement for thousands of node operators to upgrade in advance..

(9/24)

3. Substrate: a framework module to Build a Blockchain
4. Shared Security or pooled security: newly onboarded Parachains instantly benefit from the overall security of Polkadot's validators even if they have just been launched...

(10/24)

5. Parachain Leasing Period to stay competitive, with the benefits I mentioned, Polkadot Parachain will have to compete for a slot every 2 years.

You could argue that only 100?
🤌 Yes, but how many projects do you think actually work within top 100 rn?

(11/24) "DOT is bad cuz you have to pay to build on it"

This statement is totally wrong. By participating in Crowdloan, those DOT holders did not send their precious DOT into any Parachain team wallet...

(12/24) Instead, if the project won a slot, DOT will automatically be locked for a duration of time. Parachain team can't lay their figures on these DOT. SAFU!

After the leasing period ended, DOT will be sent back to the crowdloan participant wallets..

(13/24) The only thing participant lost is a cost opportunity while DOT being locked.

However, this depends on PoV nfa, it could be compensated by token reward from Parachain team.

(14/24) "Kusama is a Testnet with no value"

tl;DR, for those who are new to Polkadot,
Kusama is a Polkadot canary network. Theoretically, you can see Kusama as a mirror-environment..

(15/24) Anything before deployed on Polkadot will be deployed on Kusama first. If bug is found, fixed, test, deploy on Polkadot.

Kusama's purpose is also to test cool stuff that may or may not work.

The network is unstable so DotSama community has a phrase "Expect Chaos"

(16/24) 2 good example from Kusama community :

1. @GmOrDie_ aims to solve lacking 'gm' in DotSama community by let them transferring gm to their blockchain crush, or even frens.

GM, say it back!

(17/24)

2. @thatMediaWag aims to solve community's question 'When marketing?' by incentivize community members to start creating content sharing the love of Polkadot

In exchange content creators get reward in KSM, and grow their opportunity in this field like incubating..

(18/24) in case you are talking about roi (return on investment) in Kusama Crowdloan.

(19/24) "Only 300 validators in Polkadot"

Since security is a top priority of Polkadot, validators play a crucial role in this system.

As the number of validators is limited, validators in the set have the responsibility to be online and do their tasks..

(20/24) If they trying to damage the network,
their bonded fund along with staked amount from stakers will be slashed.

💪 This is to keep quality over quantity.

Polkadot aims to have 1,000 of active validators or more 👇
wiki.polkadot.network/docs/thousand-…

(21/24) "When $DOT burn?"🔥
DOT is inflationary asset, inflation ≈7% per year. Yet, DOT has burn mechanism.

DOT treasury fund will be spent to the governance proposals.
If the fund is not spent, it will be burnt of a percentage of its funds. (currently 1% on Polkadot)

(22/24) However, imo instead of burn, the funds could be used to grow Polkadot:

• Infrastructure deployment and continued operation.
• Network security operations
• Ecosystem provisions
• Marketing activities
• Community events and outreach
• Software development

(23/24) 'Comparing Polkadot to other L1 like Avalanche, or Ethereum'

Polkadot is Layer 0, or meta-protocol. This means there is no DApps can be built on top of it.

The thing you might want to compare are Parachains, L1.
e.g. @AcalaNetwork , @MoonbeamNetwork , @AstarNetwork

(24/24) Thank you for questions 🫡

@_jlofgren
@DazleQBT
@Erwin_Schroedy
@TheFVK
@Stevemartinio
@Paavfc
@ProphetDotsama
@daredevil3x7
@ManOnTheDot

In case I created a misinformation, feels free to point it out.
Then.. which will be the next coin/token..?