How To Short Polkadot (DOT)

    • James Page

James HeadshotAuthor: James Page - Last Updated on June 28, 2022

Summary: Shorting Polkadot is pretty straightforward, all you need is a cryptocurrency exchange that allows for short selling. While there are a few exchanges out there that have added the ability to short crypto, our recommendation is to use eToro. They’re well-known, have a global presence, and are trusted by millions of users from 100+ countries.

We’ll be using eToro in our guide, you can sign up with one of the sign-up buttons below.

Global: Sign up with eToro

USA: Sign up with eToro US

Polkadot

Before we get started, let’s quickly explain what shorting is (for those that are new to it). Shorting is the practice of selling a cryptocurrency hoping it will drop in price so you can buy it back later for cheaper… which, if successful, will give you a net profit.

It might sound a bit complex but don’t worry, it’s a lot easier than you might think.

How to Short Polkadot

Shorting Polkadot can be done in 4 steps:

  1. Find a cryptocurrency trading platform
  2. Sign up with the exchange
  3. Fund your account with fiat or crypto
  4. Short Polkadot

1. Find a crypto exchange

As mentioned before, for this guide we’ll be using eToro as they offer the ability to short the most common cryptocurrencies.

You can, of course, use any other cryptocurrency trading platform that allows for short selling.

etoro crypto

2. Sign up with the cryptocurrency trading platform

Let’s start with creating an account on eToro.

Global: Sign up with eToro

USA: Sign up with eToro US

 

eToro sign up form

The sign-up process is very easy and quick, as is the verification that needs to be completed afterwards so you can get started.

3. Funding your eToro account

Next is funding your account. You have several deposit methods to choose from when depositing funds into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.

4. Short Polkadot

These are the steps to follow to execute a short sell:

  1. Go to the search bar at the top, find Polkadot by entering the name.
  2. On the crypto page/section, on the right side, hit the TRADE button to enter the trading interface.
  3. At the top of the trading interface: Click on sell to short the crypto.
  4. Enter the amount for which you want to sell Polkadot and click on “Open Trade”.

Once you’re ready to close the trade, hopefully when the value of Polkadot has dropped, go to your Portfolio, find the Polkadot trade, and click on the red cross to close the trade.

If your assumption/prediction was right, then the profit will be added to your account after closing the trade. If you were wrong on the other hand, you’ll incur a loss which will be debited from your eToro account.

Congratulations, now you know how to short Polkadot!

Global: Sign up with eToro

USA: Sign up with eToro US

 

Disclaimer: Trading, investing, and dealing with digital and cryptocurrencies might involve a lot of risks. Their prices are volatile and performance is unpredictable. Their past performance is no guarantee of future performance.

Affiliate Disclosure: This site is supported by its users. We may receive commissions for purchases made through the links on our site. This does not impact our reviews, guides or comparisons.

 

Where to Short Polkadot (DOT)

Aside from eToro, the other major exchange you can use is Binance.

While Binance tends to be a bit more advanced when compared with eToro, they do have a lot more digital assets to trade with.

 

Frequently Asked Questions

Can I short Polkadot on Binance?

Yes, you can short Polkadot on Binance. They have over 300 cryptocurrencies on offer, have a decent phone app and a lot of advanced trading features.

About Polkadot

Polkadot a multichain open-source protocol that secures and connects a network with specialized blockchains. It facilitates cross-chain transfers of all data types or assets. Polkadot was developed to support a decentralized network of blockchains known as Web3.

Polkadot is a layer-1 metaprotocol. It underlies and describes a format to support a network of layer-1 blockchains known by parachains. Polkadot as a metaprotocol can autonomously and forklessly modify its own codebase via On-chain Governance according to the will its token holder group.

Polkadot serves as a foundation to support a distributed web controlled by its members and to facilitate the creation of new institutions, applications, and services.

The Polkadot protocol connects public and private chains as well as permissionless networks and oracles. This allows independent blockchains to trustlessly exchange information and transactions using the Polkadot Relay Chain.

Polkadot's native token DOT serves three clear purposes. It is used to stake for operations, security, facilitate network governance, as well as bond tokens that connect parachains.

Polkadot's multichain network is sharded, which means it can process many transactions simultaneously on multiple chains ("parachains"). This parallel processing power allows for greater scalability.

Substrate makes it simple to create custom blockchains. The network is flexible and adaptive and allows participants to share information and functionality. Polkadot can automatically be upgraded without the use a fork. This allows for new features to be implemented or bug removal.

The network's governance system is highly user-driven. All token holders have the right to vote on how the network runs. Polkadot gives teams the ability to create their own governance model for their blockchain, based upon their changing needs. Validators, collators, and nominees all have various duties that help to secure the network and prevent bad behavior.

Polkadot was able to successfully conclude its first Parachain Auctions in 2021. Parachain auctions used an un-permissioned candle bidding system. The winning bid is at random when the auction ends.

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