Polkadot is a scalable multichain network that enables the cross-chain transfer of any type of data or asset, including tokens.
TL;DR:
- Polkadot is a crypto project developed in 2016 to facilitate communication and interoperability between blockchains.
- It uses a multichain system with two blockchains: relay chains, and parachains, and offers parallel processing and GRANDPA, a consensus model that validates transactions quickly.
- It allows for the development of new blockchain applications in De-Fi and play-to-earn games.
- Polkadot's base token, DOT, is used by validators and nominators to confirm transactions and earn rewards.
- Polkadot was developed by
Dr. Gavin Wood , Ethereum's co-founder, and has become one of the top innovative projects in the crypto ecosystem.
Introduction
The cryptocurrency space experienced a major boom; since then, different projects and innovations have kept popping up. While many blockchains were able to adapt, new ones also sprung up with unique ways to solve issues in the digital currency sector.
In all of this, some chains were shut out of the ecosystem with no means to communicate or connect with other projects. In a bid to solve that issue, Polkadot was created. This article will look at the framework of the Polkadot Project, its history, and what makes it unique.
What Is Polkadot?
It is also considered one of the top innovative projects in the crypto ecosystem.
The Polkadot network serves as a link between blockchains, aiding the transfer of data between these blockchains. It also ensures high scalability while keeping the connected blockchains safe.
Polkadot can be seen as a set of independent chains that provides the foundations for valid and globally-coherent data structures to be hosted next to each other. These data structures are usually referred to as "parallelized chains or parachains.”
The network also serves as a stage for third-party developers to develop and create new blockchain applications in De-Fi and play-to-earn games.
Brief History of Polkadot
Polkadot was
Dr. Gavin Wood broke off from the Ethereum team in 2016 to find a solution to the shortcoming of ETH. This included issues of scalability, slow transaction speeds, and network congestion. This has led many people to consider Polkadot a major Ethereum competitor.
The network’s whitepaper was published in 2016, and afterward, Dr. Gavin Woods helped develop a nonprofit Web3 Foundation and company called Parity Technologies. Together, these two organizations were able to raise funds for the Polkadot blockchain.
The blockchain was finally launched in 2020 after a hack drained the network of millions of dollars from investors. This did not hinder the growth of the network, as it has amassed tons of wealth and numerous investors since its launch.
What Makes Polkadot Unique?
Polkadot is built not just to transfer arbitrary data across blockchains but also to transfer tokens. With this in mind, the developers have equipped the network with special features to ensure the success of the network.
Multichain
One major feature that plays a crucial role in the success of Polkadot is its
Relay Chains
The relay chain is essentially the engine of the protocol. It oversees the network’s security, consensus, and cross-chain interoperability. It keeps the network together, connects other networks to the platform, and provides transaction finality.
The relay chain was built for minimal functions and, as such, does not support smart contracts. The chain’s main task is coordinating the entire system, including the parachains.
Parachains
The parachains, or parallel chains, are usually connected to the relay chains but have more autonomy to create tokens and use cases than dApps on smart contract blockchains like Ethereum.
Parachain builders can utilize the security, decentralization, and interoperability of the relay chains on the Polkadot network.
Due to the limited number of parachains that can be built on the network, Polkadot conducts an auction where DOT holders vote on the preferred project they would like to see on the platform.
Parathreads
Parathreads work just like parachains do but with a slight difference. They use a pay-as-you-go model that only allows the Parathreads to work when required. The Parathreads also do not need to be constantly connected to the relay chain.
Parathreads are not a permanent part of the platform, so they do not need to use the parachain slots. They also have a slower block time than parachains but are still as secure and allow as much interoperability as parachains.
Lastly, a blockchain can choose to either be a Parachain or a Parathread, depending on the relay chain’s needs, requirements, or availability.
Parallel Processing
Polkadot’s ability to carry out transactions simultaneously is one feature that sets it apart from other blockchains. Unlike other blockchains, like Ethereum, which carry out transactions individually, Polkadot carries out multiple transactions simultaneously.
It uses its parachains to spread transactions to other networks, thereby increasing the speed of the transaction.
GRANDPA
Grandpa (
Unlike the traditional PoS model, the consensus model Polkadot uses allows users to offer their tokens to vote on validators, and only validators with sufficient levels of backing can begin validating transactions.
GRANDPA, the interpretation model that can validate millions of blocks at once, truly makes this unique. This greatly helps Polkadot to settle transactions quickly while ensuring the smooth running of operations on the blockchain and avoiding delays.
Popular Projects On Polkadot
There have been several projects developed on the multi-chain network. Although released in 2020, the network has managed to board over 350 actives protocols. Some of them include:
Kusama
Since its primary use is to facilitate testing, Kusama gives developers much more freedom while they put the finishing touch on their Polkadot projects. As a result, Kusama has fewer restrictions than Polkadot.
Kusama is similar to Polkadot in some areas, like the multi-chai system. Kusama also uses a main network that finalizes transactions and parachains, which are user-generated networks that users can customize for any use and run on the main chain for enhanced security.
Moonbeam
Moonbeam is a project created on Polkadot that aims to create a user interface for Ethereum Solidity contracts. Its ultimate goal is to build a multi-chain system that allows smart contracts developed on one chain to be functional on another.
This means Polkadot-enhanced contracts can now be reflected in Layer 1 bridges.
Polkaswap
Polkaswap is also a cross-chain Decentralised exchange that allows users to make the most out of the volatility pooled from several marketplaces.
Polkadot Token (DOT)
Polkadot’s base token,
DOT also serves to settle gas fees and interact with the Polkadot ecosystem.
DOT also plays an important role in facilitating the consensus machine. DOT holders could stake their tokens across several parachains. The staking is important to prevent malicious parties from using the network.
Tokenomics
The total market cap for the token was initially set at 10 million coins, but later in 2020, the Polkadot community voted, and it was decided to raise the maximum supply to 1 billion DOT coins.
In its initial coin offering in October 2017, DOT's price was $0.29, with around 2.24 million tokens offered. In the second coin offering
Conclusion
In conclusion, Polkadot represents a significant milestone in the evolution of blockchain technology. Its innovative approach to interoperability and scalability has established it as a leading Web 3 platform, facilitating the development of decentralized applications and supporting the growth of the wider blockchain ecosystem.
With its robust infrastructure and rapidly expanding community, Polkadot is poised to continue driving innovation in the blockchain industry and unlocking new possibilities for decentralized finance, digital identity, and other groundbreaking applications.