I hope this forum post finds you in good health and the pursuit of wisdom.
I was thinking about the existential deposit and I can understand that it in some way helps with deseminating wallets that are not active with those that are. However, in the future when DOT goes to 400 USD, 1000 USD or even more, it will be difficult for certain parts of the world to deposit 400 - 1000 USD just to have the privilege of transacting on our network.
Do we have any plans on removing it when it comes to this or at the very least decrease it so people from all backgrounds - economical included - can participate on our network? Thank you!
ED is introduced to ensure the security of the network and therefore likely won’t be reduced on relaychain.
However, system parachains can have much lower ED. Features on relaychain will eventually all migrate into system parachains. This means in the future user don’t need to transact on relaychain anymore and therefore high ED on relaychain won’t be an issue.
Also worth noting that 1 DOT existential deposit is a bit arbitrary and we use it for now as it is a good enough requirement, it can be changed with democracy via runtime upgrades to adapt to the price changes.
Lowering or removing the existential deposit could definitely help make the Polkadot network more accessible to a wider range of users. While it’s true that the deposit serves a purpose in discouraging inactive accounts, it could be a barrier for people in certain parts of the world where such an amount is a significant expense. As a Polkadot maximalist, I believe that we should strive to make the network as inclusive and accessible as possible, while also ensuring its security and stability. However, any changes to the deposit system would need to be carefully considered to avoid unintended consequences, such as an increase in spam or other malicious activity.
Thank you for your post on the Polkadot forum regarding the existential deposit. As you pointed out, the existential deposit is a mechanism that helps to weed out inactive wallets from the network. However, as the value of DOT continues to increase, it may become difficult for certain parts of the world to deposit the required amount just to transact on the network.
In my opinion, it is important to strike a balance between incentivizing active participation in the network and ensuring accessibility for all. While reducing or removing the existential deposit may increase participation in the short term, it may also lead to an increase in inactive accounts, which could pose a risk to the network’s security and performance.
Instead of removing the deposit altogether, a more gradual approach could be taken to decrease it over time, as the value of DOT continues to increase. Additionally, exploring alternative mechanisms for incentivizing active participation, such as staking rewards, could also help to mitigate the burden of the deposit on users.
Overall, I believe that it is important for the Polkadot community to consider the long-term implications of any changes to the network’s mechanics, and to work towards solutions that balance accessibility with network security and performance.
There is a general misconception in this thread, which is that the ED helps weed out inactive accounts. It does not. It’s a deposit, not an activity tracker, that is required for an account to exist.
The ED weeds out small accounts (or “dust” accounts). It says, “This account is only worth keeping in storage if it has a certain amount of DOT”. Why would an account not be worth keeping in storage? Well, every account in storage has adverse affects on other accounts in storage. Every time someone transacts, the system needs to find the account, read some information from it (like its current balance), do some computation (the transaction), and write a new value to the account (its balance after paying fees). If there are more accounts in the system, then looking up and operating on a single one takes more time.
Since time is a limited resource, more time per account means fewer accounts can be accessed in one block (within a 2 second time limit), means fewer transactions per second and higher transaction fees.
On the Relay Chain, this time accessing accounts also takes validators away from their primary task: validating parachains. So while lowering or removing the ED is a feel-good, easy “solution”, it actually makes the user experience and performance for the entire network worse. If anything, we should increase the ED on the Relay Chain so that people don’t use it. Of course that’s not practical yet as long as staking and governance are there.
Now for the good news: Polkadot is not the Relay Chain, but rather a network of chains. On Statemint, the ED is 0.1 DOT, so if you do want an account with less than 1 DOT, send it over to Statemint and use that. Blockspace on parachains is much less sacred than on the Relay Chain.