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Why xDOT Is Safe

Published date: November 10 2021

“How secure is the xDOT staking?”, — it’s probably one of the cornerstone questions from anyone who considers supporting parachain projects via xDOT. Let us explain how robust the xDOT setup is and why you can trust it.

By way of reminder, our users stake their DOT for their favorite Polkadot parachain and get xDOT in return. xDOT offers a substantial amount of use cases on Genshiro, our Kusama-based canary network, that includes trading, staking, and collateralizing to take loans. As such, you won’t get stuck with your DOT locked for the two-year parachain lease period and without a guarantee that a project performs well or DOT doesn’t drop in value.

But how can you be sure that your initial DOTs are securely stored and further DOT transfers are legitimate? In other words, why is xDOT secure to lock for a selected project like Equilibrium, Acala, Astar and others? Here, the multi-signature concept kicks in. Multisig is a special permission structure that allows two or more parties to sign transactions together as a group and execute them if pre-agreed consensus is reached. What can it do for your xDOT?

In our case, the access to DOTs is secured by signatures of the top trusted VC funds that are well-known in the Polkadot ecosystem. These signatures are forming a permission structure for the custodian address where we will gather all the user contributions in DOTs, before they will be staked into crowdloans. Msig counterparties need to confirm asset transfers from the custodian address. In other words, multisig doesn’t allow us to transfer DOT on our own — we need to get approvals from all multisig participants.

You are free to withdraw your DOT anytime when the staking is over, or in case the project doesn’t win a slot. Msig participants are to confirm the withdrawal.

How many signatures protect your DOTs? Equilibrium adds up to an impressive collection of four uniquely international investors: Signum Capital, Genesis Block Ventures, Digital Finance Group, and PNYX Ventures. The fifth key belongs to our team. This conglomerate needs to submit at least three approvals out of five to verify a transfer from the custodian address. It’s time to let you know about our counterparties that keep the Polkadot ecosystem running.

Here is the full list of counterparties that guarantee the security of our users’ DOTs:

1. Signum Capital

(Participated in deals totaling €57.6m in last 12 months)

Notable investments:

Equilibrium, CertiK, Oasis Labs, Sipher, Krystal, PureStake

Brief description:

Signum Capital is a Singapore-based firm that has been investing in distributed ledger technologies and crypto assets since 2017. The team of crypto enthusiasts boasts rich backgrounds. For instance, John Ng Pangilinan, SC’s Managing Director, was the founder of Signum Capital Pte Ltd, a personal investment holding company which specialized in crypto startups with a realized IRR of 122%.

2. Genesis Block Ventures

(Participated in deals totaling €74.4m in last 12 months)

Notable investments:

Equilibrium, Coin98, Hex Trust, Galaxy, Highstreet, Xcademy, Halo DAO

Brief description:

Genesis Block Ventures is a Hong Kong-based venture capital firm founded in 2020. GBV Capital grew from the Genesis Block trading firm, the leading OTC trading centre for digital assets with decades of collective experience in the crypto space, and is dedicated to the investment, development, and the creation of blockchain projects that shape the future.

3. Digital Finance Group

(Deals in the last 12 months undisclosed)

Notable investments:

Equilibrium, Unique Network, Enjin,, Mintable, RMRK, Deep DAO

Brief description:

Digital Finance Group (DFG) is a global blockchain and cryptocurrency investment firm founded by James Wo in 2015 and has assets under management of over $1 billion. Through a wide range of sectors within the blockchain ecosystem such as Web3.0, CeFi, DeFi, NFTs, the Polkadot ecosystem, DFG intends to create value, through analytical research, based on the most impactful and promising global blockchain and Web3.0 projects that will bring a paradigm shift to the world.

4. PNYX Ventures

(Participated in deals totaling €30.4m in last 12 months)

Notable investments:

Equilibrium, dTrade, Composable Finance, Minterest, Rikkei Finance, Octopus Network

Brief description:

PNYX Ventures is a digital asset management firm specialising in blockchain capital markets. This venture fund invests in early stage projects driving project teams through blockchain capital markets towards a Web3 future.

With these biggest ecosystem influencers as our Msig partners, we have zero doubt about the security of our users’ xDOTs. We guarantee secure DOT storage during the whole parachain lease period and transparent DOT return at the end of the two-year lease.

Stake via xDOT safely now!

We also remind you that Equilibrium enables users to support their favorite parachains from the projects that are currently running crowdloan campaigns: Astar, Litentry, Manta, and Acala. Some of these projects are offering additional bonuses for xDOT participants. For example, our users can expect additional bonuses from Astar (30%), Litentry (10%), and Manta (10%). Needless to say, we offer a 20% bonus to all users who make a contribution to Equilibrium crowdloan via our fluid xDOT staking before November 25. Our crowdloan is on its way, nevertheless, you can vote via the Equilibrium platform and enjoy the benefits of fluid xDOT staking today!

Feeling xDOT-excited? Don’t miss out on our xDOT AMA session on November 18 at 1PM UTC and learn more about our wrapper multiple advantages! Register here and don’t hesitate to submit your questions in the Ask a Question section.

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Why xDOT Is Safe was originally published in Equilibrium on Medium, where people are continuing the conversation by highlighting and responding to this story.