How much do you know about Polkadot, the king of cross-chains
Introduction:
Polkadot was launched in 2016 and is governed by the Web3 Foundation, a foundation dedicated to building a free decentralized web. The Web3 Foundation contracts with Parity Technologies to structure its protocol. Its founders are Gavin Wood, eter Czaban and Robert Habermeier. Gavin Wood was one of the co-founders of Ethereum, thus bringing legitimacy and confidence in the eyes of many cryptocurrency enthusiasts, especially the Chinese audience. Build a token bridge
The team has extensive experience in distributed ledger systems, blockchain protocols (especially Ethereum), cryptography and wallet technology. Although primarily being developed by Parity Technologies, several independent teams have contributed to the development of Polkadot.
What is Polkadot?
Polkadot’s protocol is similar to a bridged sharding protocol with a focus on maintaining communication, value transfer, and aggregated blockchain security. It unifies blockchains into a single network by allowing different blockchains to run in parallel and interoperate with each other. A unified network enhances the strengths of different blockchains and circumvents weaknesses.
According to the Polkadot team, Polkadot is a project for developers. It is designed to connect public chains, private chains, oracles, DApps and application services and work seamlessly in parallel. Therefore, it helps to connect different independent blockchains together into a unified Web3 Internet.
Polkadot components
Polkadot is Build a cross chain bridge on the Substrate blockchain building framework, which is derived from Parity’s experience with Ethereum, Bitcoin and enterprise blockchains. Polkadot state machines are compiled using WebAssembly (WASM), a high-performance virtual environment.
Additionally, Polkadot uses libp2p for peer-to-peer discovery and communication. It is coded in C++, Rust and Golang languages to facilitate development by a wide range of developers.
Polkadot governance model
The Polkadot governance model is clear on-chain. It aims to bring all stakeholders into the governance committee. Users only need to hold native DOT tokens to participate in the decision-making of the system. At present, the Polkadot Council and Technical Committee have been established, so the project and its development direction are entirely in the hands of DOT holders. Governance proposals are submitted by the Council, Technical Committee or DOT holders. A public vote is then conducted by DOT holders.
Polkadot network status
Polkadot is still under development. Polkadot launched the genesis block on May 26, 2020 with a relay chain that will eventually release up to 100 parachains. Full launch is expected by the end of 2020. It is currently being tested on an open testnet to verify functionality and security before full testing.
Polkadot Advantages
The Polkadot project will revolutionize blockchain technology by providing a bridge-like framework with the following advantages:
1. Unlimited scalability: Polkadot can support an unlimited number of blockchains and connect them together. These are called Parachains.
2. The consensus mechanism is adaptable: Since different blockchains operate with different consensus mechanisms, the Polkadot platform provides an open and adaptable consensus mechanism to host them.
3. Cross chain bridge development transactions: The framework can support value transfer between different blockchains. This is essential for interoperability and true integration.
4. Clear governance mechanism: It has a clear governance mechanism that eliminates the main problems faced by other blockchains.
5. Upgradability: Polkadot supports upgrades without resorting to laborious hard forks to deploy protocol changes.
6. Aggregate security: Blockchains connected to Polkadot can be protected through a unified security umbrella. This can help protect smaller chains that cannot be guaranteed safe on their own.
Polkadot Token (DOT)
Polkadot tokens, represented by DOTs, are native assets of the Polkadot platform. It has three main functions: governance, staking and bonding. The total supply of DOT is 10 million.
Governance
As mentioned earlier, DOT holders have the right to govern the platform. When we say “entitled”, it does not mean that they are privileged, but embedded in the Polkadot protocol, i.e. DOT holders inherently have a governance function. These features include changing network fees, auctions, and the schedule for adding parachains. A parachain is a chain that runs in parallel with the Polkadot relay chain. Additionally, DOT holders can also have an impact on upgrades, bug fixes and other system maintenance.
mortgage
Decentralized networks require consensus mechanisms to ensure that only valid transactions are confirmed. Polkadot utilizes NPoS (Nominated Proof of Stake) as its verification algorithm. Moreover, DOT holders can choose to participate in this essential network operation.
In general, DOT holders can stake DOT to verify the Polkadot network, and there is risk in staking DOT, and in return they can get rewards. This also discourages bad actors from joining the network, since if they “misbehave” they are likely to lose their staked tokens.
The requirements for participating in staking are largely dependent on the duration of the staking and the total number of tokens staked.
bind
The final use case for DOT tokens is bonding, the process of which is to bond DOTs to add new parachains. It is an extension of the proof-of-stake functionality.
DOT 100x denomination split
After the Council and Technical Committee were formed, a community poll was conducted to determine how many Plancks should be considered a DOT token. Planck is the smallest unit of exchange in Polkadot and this value does not change. The community votes on how many Plancks one DOT is equal to. Now the community has decided that a DOT is equal to 1e10 Plancks instead of 1e12 Planck. Therefore, the new version of DOT tokens will be equal to 1/100 of the old DOT tokens.
The token split will take place on August 21, 2020 at approximately 13:15 (UTC) at block height 1248328. At that point, the user doesn’t have to do anything because it’s just a front-end change. Likewise, most exchanges automatically increase the number of DOT deposits of users after a currency adjustment. This means that if you deposit 10 old DOT tokens before the revaluation, you will automatically have 1000 new DOT tokens after the revaluation. To protect users from redeeming new DOTs, users must wait until after the split to withdraw new DOTs.
Investors must keep in mind that some exchanges (such as OKEx, MXC, etc.) have trading pairs denominated in old DOTs, while others (such as Binance and Kraken) have trading pairs denominated in new DOTs. DOT holders and traders should confirm their DOT policies with their exchanges.
Projects built on Polkadot
The Polkadot ecosystem has a wide range of services and uses. There are currently 188 projects in development on Polkadot. The areas of these projects include DeFi, cryptocurrency wallets, infrastructure, oracles, DAOs, privacy, exchanges, gaming, IoT, scaling solutions, and more.
Some well-known projects such as Chainlink, Ankr, Celer Network, Akropolis, Ocean Protocol, 0x Protocol, imToken, etc. are being deployed on the Polkadot protocol.
The role of Polkadot in DeFi
Decentralized Finance (DeFi) relies on composability, cross-chain communication, value transfer and the integration of protocols with each other. This is actually the whole goal of the Polkadot project. Therefore, DeFi projects can take advantage of Polkadot.
For example, the DeFi automation and aggregation project Akropolis relies on integrations with Maker, Compound, Curve, and dYdX. They cooperate with each other and contribute greatly to the Polkadot ecosystem.
Similarities between Polkadot and the upcoming Ethereum 2.0
In the Ethereum 2.0 phase 0, it is expected to be launched in November 2020, and it will launch a high-profile staking mechanism. However, the full deployment of Ethereum 2.0 will not be completed until several years away. It appears that Polkadot shares a striking similarity with Eth2.
For example, both blockchains support sharding, Bridge Smart Contract Development Services which means they can allow individual shards to take on the workload and communicate with each other to execute transactions in parallel. They all implement a hybrid consensus model, staking mechanism, and state transition functions.
in conclusion
Polkadot is rapidly gaining traction in the DeFi space and the wider crypto community. The Polkadot project is rapidly gaining value due to ease of integration, funding and extensive composability, and the Polkadot ecosystem appears to have a positive impact on project token prices.
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