faq.tex

\section{Frequently Asked Questions}

\begin{description}

\item[Is Polkadot designed to replace (\textit{insert blockchain here})] No. The goal of Polkadot is to provide a framework under which new blockchains may be created and to which existing blockchains can, if their communities desire, be transitioned.

\item[Is Polkadot designed to replace (\textit{insert crypto-currency here})] No. Polkadot tokens are neither intended nor designed to be used as a currency. They would make a bad currency: most will remain illiquid in the staking system and those that are liquid will face substantial fees for transfer of ownership. Rather, the purpose of Polkadot tokens is to be a direct representation of stake in the Polkadot network.

\item[What is the inflation rate for Polkadot staking tokens] The Polkadot staking token base expansion is unlimited. It rises and lowers according to market effects in order to target a particular proportion of tokens held under long-term bond in the validation process.

\item[Why does staking token ownership reflect stakeholding] This is a mechanism realised by the fact that they underpin the network's security. As such their value is tied to the overall economic value that Polkadot provides. Any actors who gain overall value from Polkadot operating correctly are incentivised to ensure it continues to do so. The best means of doing so is to take part in the validation process. This generally implies ownership of staking tokens.

\end{description}