Redenomination of DOT
While DOT is the unit of currency on Polkadot that most people use when interacting with the system, the smallest unit of account is called the Planck. A Planck's relation to DOT is like the relation of a Satoshi to Bitcoin. Before 21 August, the DOT was denominated as 1e12 Plancks, that is, twelve decimal places. After Denomination Day, DOT is denominated as 1e10 Plancks, as in, ten decimal places. DOT denominated to twelve decimal places is referred to as "DOT (old)" and DOT denominated to ten decimal places is generally referred to as "DOT". When the difference must be made explicit, the current ten-decimal-denominated DOT is referred to as "New DOT".
REDENOMINATION EXPLAINER
Check out our technical explainer video that explains more of Redenomination.
The change in denomination, henceforth referred to as the redenomination, was voted on by the community of DOT holders. The community decided between four options, to change the DOT denomination by a factor of ten, one hundred, one thousand, or not at all. The end result was to change the denomination by a factor of one hundred.
The overall effect of this change was that the number of Polkadot's smallest unit, the Planck, remained constant, while the DOT balance for all holders was increased by a factor of one hundred. As one can see from the example below, the number of Plancks that a user has does not change, only the number of Plancks that constitute a single DOT. A user with 1_000_000_000_000 Plancks still has the same number of Plancks, but will have 100 DOT under the new denomination, as opposed to one DOT under the old denomination.
NOTE
There are no state changes with redenomination. There are no transfers. The real change regards the social consensus around where to put the decimal place when we talk about what constitutes a DOT.
Origins
The initial vote for redenomination occurred as a referendum on the Kusama blockchain. The referendum was summarized as having four effects if approved by KSM holders.
REFERENDUM SUMMARY
The total allocations of DOT will increase one hundred times from 10 million to 1 billion.
DOT allocation balances will increase by a factor of one hundred, such that 1 DOT will be 100 DOT.
The distribution of DOT does not change, and holders of DOT still own an equal share of the network as before the change.
The precision of DOT will change from 12 decimal places to 10 decimal places.
The main benefit of this change is to avoid using small decimals when dealing with DOT and to achieve an easier calculation system.
The initial referendum was proposed prior to the Polkadot genesis block under the assumption that making a redenomination would be simpler before the Polkadot chain was live. However, many in the community pointed out the disconnect of the two networks and how it was unfair for holders of DOT to be impacted by a vote by a different token holder set. For this reason, Web3 Foundation decided to make a new vote on Polkadot when it went live, although the Kusama vote ended with a majority in favor of the redenomination change.
Web3 Foundation summarized the decision not to change:
NOTE
However, given the non-negligible amount of opposition, including from some within the ranks of Web3 Foundation and Parity, the Foundation decided that we cannot, in good faith, sponsor the redenomination.
The Vote
After the genesis block of Polkadot was created and the network was running with a decentralized community of validators securing the network, Web3 Foundation decided to put the redenomination topic up to a vote again. This time, the vote was explicitly binding — meaning that it would be executed if voted through. In comparison, the vote on Kusama was of course non-binding, being at best a way to capture a signal without a direct way to affect the Polkadot chain.
Based on the feedback received during the Kusama referendum, the Polkadot vote was held as an approval vote, with four available options. DOT holders could issue votes for any configuration of the four options: no change, a change of 10x, a change of 100x, or a change of 1000x. The vote logic was contained in a specially-built Substrate pallet that was included in Polkadot's runtime for this poll.
SUMMARY OF THE VOTE
Any combination of the four options may have been approved of by the voter. There was no need to only select one option.
Approving of all or none of the options was equivalent and did not affect the outcome.
All voters were able to alter their votes any number of times prior to the close of the poll.
No discretionary lock-voting was in place; all DOT used to vote counts the same.
Voting was made on a per-account basis; a single account must have voted the same way and was unable to split its vote.
This vote did not affect any economics of the Polkadot platform. As in, staking rewards, inflation, effective market capitalization, and the underlying balances of every account remained completely unchanged. It was “merely” about what units the network uses to denominate the balances into “DOT”.
With a voting period of two weeks set, the redenomination was now in the hands of the Polkadot community for a final, binding decision.
The Outcome
After two weeks of voting, the results of the redenomination vote were tallied. About one third of the total DOT in the network participated in the vote. The redenominaton proposal passed with 86% of the voters favoring a 100x factor increase (or two decimal places of precision loss).
Polkadot's redenomination then took place on 21 August, now known as Denomination Day, at block #1_248_328.
What This Means for the Community
If you are a DOT holder or user of the network, then you do not need to take any action. The DOT redenomination was a purely front-end change. You still hold the same amount of Plancks after the change, but now it will appear that you hold 100x more DOT. This change applies proportionally to every account.
What This Means for Builders of Tools
If you are the builder of a tool that consumes the @polkadot/api package — then there should be no real changes that need to be made in your application. The denomination is technically a cosmetic change and every value is still a constant amount of Plancks.
However — if you are a builder of a tool that displays DOT balances to users (e.g. a wallet) or handles DOT balances in an off-chain or custodial way, then you will need to ensure that you display the correct denomination of DOT to users.
Please see our Ecosystem Redenomination Guide for recommendations.
Please reach out to support@polkadot.network if you need any assistance in making sure your software is compatible with the redenomination.
