What is existential deposit and how to participate in crowdloans in a right way?

On the Polkadot network, an address is only active when it holds a minimum amount, currently set at 1 DOT (and 0.0000333333 KSM on the Kusama network). This minimum amount is called the Existential Deposit (ED).

Dust accounts are accounts with very little funds, generally less than the amount needed to conduct a transaction. Too many dust accounts add unnecessary data to the blockchain, which would make it difficult for full nodes to sync with the network (since every full node has a complete copy of the blockchain). 

If an account drops below the ED, the account is deactivated (“reaped”) and any remaining funds are destroyed. The address can only be reused by reactivating it with a new deposit larger than the existential deposit. This will not restore the destroyed funds. 

What to pay attention to

• Accounts that have never received a deposit are not visible on the blockchain
• If you send funds lower than the ED to an empty account, the transaction will fail (nominators need to pay attention to this when collecting staking rewards. See below.)
• If you are sending all (or almost all) of your funds out of an account, which will leave the remaining balance under the ED, the account will be deactivated and the funds reaped
• An account can be reactivated anytime, however, this will not bring back any previously reaped funds
• To protect yourself from accidentally slipping below the ED amount and losing your funds, keep the option "transfer with account keep-alive checks" on 
• Exchanges have their own minimum deposit requirements for each deposit and they're usually slightly higher than the ED. Make sure to check on your exchange what these minimums are before sending any funds to it.
• When contributing to crowdloans make sure that your balance doesn't drop below the ED or that you contribute with your entire balance. Learn more here and here.

How to prevent your account from going below the ED 

In order to keep your account alive, make sure the “keep alive” option on Polkadot-JS UI is active when sending funds. This will not let you send a balance transfer that would reduce your account below the ED.

Please note: You can send your entire balance out anytime

The existential deposit is NOT unspendable. It just keeps your account alive. If you decide you do not need this account anymore, you can send your entire balance out anytime. You just need to disable the "keep-alive" check and enable the switch to transfer your entire balance. Please refer to this article for more details.

You can also reactivate your account anytime by depositing at least the existential deposit.

Important note for nominators (stakers)

An account needs to be activated with the existential deposit before staking rewards can be sent to it. DO NOT direct staking rewards to an inactive account. If they are below 1 DOT, they will not arrive and you will lose them.

Parachain Auction Telegram Bot! All the information on each and every crowdloan campaign, accessible in one place.

What about its features?

We’ve designed the functionality to be as simple and straightforward as possible.

You can:

• share projects and terms of participation there with your friends;
• add projects to your favorites;
• see instructions on how to participate in a crowdfunding campaign.

And this is what the Crowdloan Info Bot is about.

PromoTeam is a diverse team of specialists and blockchain activists with various skills that actively promotes the Polkadot ecosystem in the English-speaking and Russian communities.

Our main activity is content production, offline and online event organization, community management and creation, product marketing, development of ambassador programs.

We also run validator nodes for Polkadot and Cosmos blockchains and participate in the Polkadot ecosystem projects as investors, advisors and contributors.

Telegram |Parachain News| Medium | Twitter

Follow all the latest info on crowdloan through 👉 Crowdloan Info Bot

Contact us: polkadotpromoteam@gmail.com