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Tokenomics

xcDOT token​

The XC-20s tokens are a new type of interoperable tokens that conform to the ERC-20 standard but are also Substrate-native assets. All fungible assets created in this format will be able to move to other Polkadot parachains, and remote parachain tokens will be able to move to Moonbeam as XC-20s. The first XC-20 token, xcDOT, is now live within Moonbeam’s fully Ethereum-compatible environment and can be created by transferring DOT from the Polkadot relay chain.

GLMR token​

GLMR is the utility token in the Moonbeam network. It can be used to perform a variety of functions. Some of them include:

  • providing an incentive to collators and facilitating the creation of the decentralized node infrastructure of the Moonbeam network;
  • paying transaction fees and implementing other activities on the Moonbeam network;
  • providing an on-chain governance mechanism that allows users to participate in the governance activities, such as voting and proposing network updates; and
  • facilitating the gas metering function of the smart contract execution.

stDOT token​

The stDOT token is a tokenized version of staked xcDOT. When a user deposits xcDOTs into the Lido liquid staking smart contract, they receive the corresponding amount of stDOT tokens. The stDOT token represents Lido users’ deposits, corresponding staking rewards, and slashing penalties. The stDOT token is a liquid alternative to staked xcDOTs: it can be transferred, traded, or used in DeFi applications. Lido makes the stDOT token balance track the corresponding balance of the Polkadot chain DOTs. A user’s balance of stDOT tokens corresponds 1:1 to the amount of DOT a user can receive. While the fact that the stDOT balance tracks the corresponding amount of the Polkadot chain so that xcDOTs should be the main driver of the stDOT/xcDOT exchange rate, several other factors are affecting the market prices.

wstDOT token​

wstDOT token simply represents user shares in the stDOT token. wstDOT token can be used in other DeFi applications, where it is necessary to have a non-rebaseable token (with a stable balance, unlike stDOT, whose balance is constantly changing due to the rewards/losses accumulation). The wstDOT token price is equal to the price of one share of the stDOT token, so if Lido receives a lot of rewards, the price can increase dramatically.

LDO token​

The Lido DAO governs a set of liquid staking protocols with Lido on Moonbeam among them. The Lido DAO decides on Lido’s key parameters (e.g., fees) and executes Lido upgrades. The Lido DAO members govern Lido to ensure its efficiency and stability. To have a vote in the Lido DAO, one must hold its governance token, LDO. LDO voting weight is proportional to the amount of LDO a voter stakes in the voting contract. The more LDO is locked in a user’s voting contract, the greater decision-making power the voter gets. The exact mechanism of LDO voting can be upgraded just like in other DAO applications.