(2021-02-24) Coinmarketcap A Deep Dive Into Polkadot

By Polkadot: A Deep Dive into Polkadot. Polkadot is a next-generation blockchain and layer-0 protocol that unites multiple specialized blockchains into a unified, scalable network. Polkadot was designed as part of a broad vision for a fair, secure and resilient web that protects user interests by design (Web 3.0).

By providing the foundation for a flourishing ecosystem of layer-1 blockchains, Polkadot enables new business models, services, organizations — and even entire societies and economies — to take shape and thrive into the future

In simple terms, Polkadot is a “blockchain of blockchains,” allowing many different types of chains to work and interact securely together within the same ecosystem.

The first version of what would become the Polkadot codebase was released in 2019 as Kusama, an unaudited canary network.

The rollout process for parachains — the specialized layer-1 blockchains that make Polkadot a multichain network — began in December 2020 with the launch of the Rococo parachain testnet. Rococo is designed to test the parachain consensus process as well as parachains built by the community and their interaction with each other. Parachains are expected to roll out on Kusama and Polkadot in Spring 2021.

Polkadot is a heterogeneous multichain network, meaning it connects various blockchains designed for specific purposes together into a single ecosystem.

These diverse layer-1 blockchains are known as parachains for the way that they process transactions in parallel, and are connected together via the Polkadot Relay Chain.

The Relay Chain is the central chain of Polkadot, built using Substrate, Parity’s framework for developing custom blockchains.

Polkadot parachains are independent layer-1 blockchains that run in parallel to each other connected to the Relay Chain. Each parachain can have its own design, token economy, functionality and governance. By connecting to Polkadot, parachains share the security of the entire network, meaning they do not have to bootstrap their own validator community, and are able to exchange not just tokens but any arbitrary data between chains.

Parathreads are parachains that connect to Polkadot using a pay-as-you-go model. They provide a lower barrier to entry for blockchains that may not need continuous connectivity to the network.

Bridges are a special type of parachain that allow chains and apps on Polkadot to connect and communicate with external networks such as Ethereum and Bitcoin.

Consensus – Nominated Proof-of-Stake (NPoS)

Roles in Polkadot NPoS

Validators

Nominators

Collators

Fishermen

Scalability

Blockchains in isolation can only process a limited amount of traffic. As a sharded multichain network, Polkadot can process many transactions on several chains in parallel, eliminating the bottlenecks that occurred on legacy networks that processed transactions one by one.

For high-traffic, high-throughput applications with a large number of users, deploying on Polkadot is expected to be more economical than building either a solo blockchain or building on top of an existing smart contract platform.

To deploy a parachain, teams are required to lease a parachain slot by locking up an amount of DOT for the duration of their lease (teams can choose to lease a slot in six-month increments up to two years). As this full amount will be returned to the team at the end of their lease, the cost of leasing a parachain slot is best described as the opportunity cost of not having access to that DOT for the duration of the lease.

Polkadot gives teams the freedom and flexibility to design their own layer-1 blockchain from the ground up, and they are not forced to pass gas fees on to their end users, making Polkadot applications potentially more economical and user-friendly for users as well.

The DOT Token

DOT is inflationary, which means that unlike Bitcoin, there is no maximum number of DOT. The rate of inflation is not fixed: it is designed to be 10% in the first year.

The Polkadot Treasury

The treasury raises funds by channeling some of the validator rewards (from minting) and a fraction of the transaction fees and slashes (the fine paid by a validator who acts maliciously or incompetently). These funds are used to pay for the smooth running of the network and the wider ecosystem, and can be used to fund projects supported by the community through on-chain treasury funding proposals, which can be approved by the Polkadot Council.

Governance

Polkadot Governance

Parachain Governance

Communities on Polkadot govern their own network as they wish and hold a transparent stake in the future of Polkadot’s network governance as a whole.

Easy Forkless Upgrades

Interoperability

Unlike older networks that operated largely as standalone environments, Polkadot offers interoperability and cross-chain communication.

The Polkadot Ecosystem

Over 300 projects have been or are currently being built for the Polkadot ecosystem, ranging from core technical infrastructure to applications for decentralized finance (DeFi), privacy-oriented data and digital identity systems (often called self-sovereign identity), social networking, IoT, gaming, robotics and supply chain logistics. Many of these are open source projects.

Among the projects currently being developed are, for example, services that will enable applications in which a user's account and data are stored by encrypting them locally on their own devices rather than on a centralized server. This approach gives people full control over their own data in a user-friendly way

We may also see community-owned platforms arise that offer services and exchange value in a decentralized way through on-chain treasuries and governance.

Polkadot is designed to enable a future in which digital infrastructure protects our interests by design, trade networks and economies are more representative and efficient, where there’s greater access to open financial services, and we have reliable, open-source, peer-to-peer infrastructure for collaboration and communication.