How to Unbond Your DOT Tokens in Preparation for Crowdloans

On October 13, Gavin Wood and Robert Habermeier unveiled the highly anticipated news that Polkadot is ready for its first parachains to launch. A motion was sent to Polkadot Council to open up the network’s first parachain slot auctions, proposed to begin on November 11th, 2021. If you plan to participate in any crowdloan auctions, you’ll want to unbond your DOT tokens as soon as possible. As a reminder, the unbonding process takes 28 days to complete before your DOT tokens are freely transferable again.

A crowdloan is a funding mechanism that allows DOT holders to support a project by locking their tokens until the end of the lease of the slot. The parachain project can use these tokens to pay for a parachain slot on the network for the duration of the lease (up to 96 weeks on Polkadot) after which point the original DOT tokens are returned to contributors. Parachain teams are free to reward contributors however they see fit. You can learn more about the basics of a crowdloan in this articleGo to page https://moonbeam.network/news/what-is-a-crowdloan-its-benefits-and-how-to-participate.

To contribute to a crowdloan campaign, you need to make sure your DOT tokens are transferable, and therefore, available. If you have nominated validators on the Polkadot Network, those staked tokens will be locked unless you have explicitly unbonded them (this does not happen automatically). Unlocking them is a two-step process:

1. Unstaking: stops all ongoing nominations. This means that the corresponding DOT balance is available to stake with other validators, but is not yet available to be transferred. This is referred to as being “bonded.”
2. Unbonding: starts the unbonding of the corresponding balance. During this unbonding period (28 days for Polkadot), your DOT tokens do not earn rewards and are illiquid. Once this step is complete, the tokens will be transferable.

Tokens might be locked (bonded) as well via other mechanisms such as democracy. To learn how you can unbond tokens locked through democracy you can check this Polkadot wiki articleGo to page https://wiki.polkadot.network/docs/en/maintain-guides-democracy#unlocking-locked-tokens.

This tutorial will guide you through the process of how to check if your tokens are ready to contribute to a crowdloan, and if not, how to unstake/unbond them to have them ready. A separate tutorial on how to participate in the crowdloan itself will be provided shortly.

If the account used was imported from a Ledger hardware wallet, make sure you have the device connected to your computer and unlocked, as you will need to sign a few transactions with it. This guide assumes you have DOT tokens on a self-hosted wallet. If you’re currently staking DOT on an exchange such as Kraken, the unstaking and unbonding process might be as simple as just a few clicks, but you’ll need to check with the exchange for exact instructions.

The Difference Between Unstaking and Unbonding

Unstaking is the action of removing a nomination for a validator (or multiple validators). By unstaking all nominations, your tokens will stop earning staking rewards and are ready to be used to nominate another validator. However, they are not yet ready to be transferred. Once the nomination is no longer active, the tokens are still bonded (locked). You will need to take the additional step of unbonding them in order to use them for a transaction or crowdloan.

In general terms, bonding is a process by which tokens are temporarily locked. Staking is one of the scenarios that requires tokens to be bonded. Unbonding is the action of telling the network that you want to unlock these tokens. After the unbonding time, which is 28 days for Polkadot, you can withdraw the tokens, and they become a transferable balance.

Checking Your Balance

Any DOT tokens that have been used for staking will be displayed as part of your locked balance. To check this, visit the Polkadot JS appsGo to page https://polkadot.js.org/apps/?rpc=wss%3A%2F%2Fpolkadot.api.onfinality.io%2Fpublic-ws#/accounts and ensure you’re connected to Polkadot (in the top left corner). Once the app is connected, you can take the following steps:

1. Hover over the “Accounts” tab.
2. Select the “Accounts” option.
3. Expand the balance information.
4. The locked DOT balance (if any) will be displayed here. If you hover over the information icon, it should display information related to the type of lock, for this example, “Staking.”

You can see in the screenshot above that you have three balances: transferable, locked, and bonded. The balance that shows as “transferable” can be used to contribute to a crowdloan campaign. However, the balances that show as either locked or bonded because of staking can’t be used. The following sections will take you through a step-by-step guide on how you can unstake and unbond your locked DOT.

How to Unbond Your DOT Tokens

If you have locked DOT tokens as previously shown, you can directly unstake and unbond them using a single action, which is “Unbond funds”. Unbonding takes 28 days on Polkadot.

First, you need to head to the Staking options. To do so, take the following steps:

1. Hover over the “Network” tab.
2. Select the “Staking” option.

This will load the staking overview window. In here, navigate to the “Account actions” tab, from which you manage everything related to your account’s staking.

There is an important prerequisite to unbonding that applies only if you are unbonding all of your DOT in a stash. If you are only unbonding a portion of your DOT, you can skip ahead to the next section. If you are unbonding an entire stash of your DOT, you’ll first need to “Stop” or “Chill” your nominations. To do so, take the following steps:

1. Click on All Stashes.
2. Locate the stash you want to Chill. Click on the “Stop” button.
3. Submit the transaction.

These actions will initiate a transaction wizard titled “unbond funds”, in which you need to:

1. Set the amount of DOT tokens you want to unbond, or click on the “all bonded” slider to unstake and unbond your entire DOT balance.
2. Click on “Unbond.”

Next, sign and submit the transaction. If you are using a Ledger, verify the transaction and approve it on the device. After the transaction is confirmed, your unbonding period will start (28 days on the Polkadot Network).

To check the status of your unbonding, take the following steps:

1. Hover over the “Accounts” tab.
2. Select the “Accounts” option.
3. Expand the balance information.
4. The unbonding DOT balance will be displayed here. If you hover over the information icon, it will display the unbonding time remaining.

Once the bonding lock expires, you need to submit another transaction to withdraw the funds manually.

How to Withdraw Your DOT Tokens Once the Lock Expires

After the unbonding time expires, you can withdraw your locked tokens. To do so, head to the “Accounts > Accounts” tab and take the following steps:

1. Expand the balance information.
2. Click on the lock icon.

This will initiate the transaction wizard to withdraw the bonded funds. After the transaction is confirmed, your locked tokens should now be added to the transferable balance.

And that is it! You have successfully unstaked and unbonded your DOT tokens!