Crypto for Beginners 101: All you need to know about Polkadot ($DOT). “Ethereum killer” in the future?

Many smart contract platforms aim to one day become an “Ethereum killer”. But Polkadot is taking a different approach. Polkadot has surpassed every other Ethereum competitor in terms of total market capitalization, including longtime players, like Cardano and EOS.

That is not because the platform intends to compete with Ethereum. Instead, Polkadot wants to act as a bridge between platforms, where Ethereum applications and assets can be “bundled” into the Polkadot ecosystem, for faster and cheaper functionality.

What is Polkadot ($DOT)?

Polkadot is a Blockchain Platform – multi-Chain, heterogeneous and scalable technology. Allows individual Blockchains to connect with each other to share data to form a decentralized network.

Simply, Polkadot is like a blockchain of many blockchains, allowing users to build their own blockchain on the Polkadot system. Through Multi-chain, other organizations can completely build a Blockchain system that runs directly on Polkadot’s network. This is similar to ERC-20 tokens running on smart contracts of the Ethereum network. And this is the scalability of the Polkadot network.

Polkadot focuses on solving two main problems of Blockchain: Interoperability and scalability of the network. Polkadot’s (DOT) vision is to create a “Decentralized Web”, where our identities and data will be controlled by ourselves, not some organization or government.

The architecture of Polkadot

Main chain (Relay chain)

This is the core of this network. The main chain is built to make the connection between Parachains flexible. There, the validator will take on the task of protecting and administering the network.

Scaling Solution Layer 2 (Parachain)

Parachain consists of independent blockchains that are connected to the main chain to take full advantage of the network effect. Parachain works on the results of validation by specified validators. It combines with a relay chain to take advantage of the network, helping to speed up the development of the system many times over. In other words, this is a type of subchain belonging to the main network.

Bridges

Bridges are a special Parachain form of the network. Bridges have the ability to link the Polkadot ecosystem with other blockchain protocols such as Ethereum or Bitcoin. This is also a cost-effective solution for projects that do not require a constant connection to the main chain.

Parathread

This type is similar to Parachain, but the difference is that this chain is not continuously connected to the main chain, so if any project does not have a need for a continuous connection, this connection chain can be used to save money.

Outstanding Features

True interoperability

Polkadot enables cross-blockchain transfers of any type of data or asset, not just tokens. Connecting to Polkadot gives you the ability to interoperate with a wide variety of blockchains in the Polkadot network.

Economic & transactional scalability

Polkadot provides unprecedented economic scalability by enabling a common set of validators to secure multiple blockchains. Polkadot provides transactional scalability by spreading transactions across multiple parallel blockchains.

Easy blockchain innovation

Create a custom blockchain in minutes using the Substrate framework. Connect your chain to Polkadot and get interoperability and security from day one. This ease of development helps Polkadot’s network grow.

Forkless and future-proof

Polkadot can upgrade without hard forks to integrate new features or fix bugs. This capability enables Polkadot to easily adapt to changes and upgrade itself as better technologies become available.

Security for everyone

Polkadot’s novel data availability and validity scheme allows chains to interact with each other in a meaningful way. Chains remain independent in their governance but united in their security.

User-driven network governance

Polkadot has a sophisticated governance system where all stakeholders have a voice. Upgrades to the network are coordinated on-chain and enacted autonomously, ensuring that Polkadot’s development reflects the values of the community and avoids stagnation.

What problems does Polkadot solve?

As mentioned in the introduction, Polkadot was born to solve problems that his predecessors could not solve. And of course, the young generation will always be active, enthusiastic and find ways to break out of the shadow of the old generation.

Scalability and transaction speed

Since Polkadot is a multi-chain technology, it allows the system to parallelize transactions on many different parachains, which makes Polkadot very impressive transaction processing speed.
For example, Ethereum currently supports processing up to 15 transactions in 1 second, while a single application on Polkadot can process 1000 transactions in 1 second.
Therefore, the whole Polkadot Ecosystem is capable of processing transactions hundreds of times faster than individual Dapps, meaning hundreds of thousands of transactions per second. With such a huge processing speed, expanding the Polkadot network is only a matter of time.

Interoperability

Individual blockchains cannot interact with each other, multi-chain solutions are new and few. Polkadot has a multi-chain solution, to support individual blockchains to exchange tokens, limiting unnecessary costs.

Adoption

Because blockchain is still new, it is necessary to make it easier for everyone to use it, such as using the internet and applying it to daily life.

Main factors in the Polkadot ecosystem

• Nominators: Secure the Relay Chain by selecting trustworthy validators and staking dots.
• Validators: Secure the relay chain by staking dots, validating proofs from collators and participating in consensus with other validators.
• Collators: Maintain shards by collecting shard transactions from users and producing proofs for validator.
• Fishermen: Monitor the network and report bad behavior to validators. Collators and any parachain full node can perform the fisherman role.

Polkadot Ecosystem

Polkadot Web3 Foundation has created a fully integrated Blockchain to provide developers with infrastructure quickly and efficiently. The web platform provides a native, native layer that helps you create your Blockchain as quickly as possible with the support of one of the most popular languages like Rust and C++. All projects carried out with development on the platform are automatically considered compatible with the Polkadot Blockchain.

The Polkadot ecosystem currently has a lot of new projects in the research phase. Many investors are waiting for projects that simulate and improve upon Ethereum DeFi applications built on Polkadot. Despite having many features similar to Ethereum 2.0, Polkadot did not follow the path of competing with this ecosystem but chose to connect to it via a bridge. Polkadot wants to be a complementary partner for other blockchains, in order to expand the cross-chain DeFi network, and improve the user experience. According to Polkadot’s report, the Polkadot ecosystem is quite complete with over 470 projects in all areas like Wallet, Oracle, NFT, DAO, Bridge, Data, DeFi, Privacy, SmartContracts, Exchange, Scaling, Gaming, Identity, IOT, Crowdloan, Hiring, CeFi, Auction is building.

Defi

Polkadot’s scalability, interoperability, and cross-chain functionality have attracted many projects including Acala’s cross-chain defi center and stablecoin platform; Moonbeam Parachain’s smart contract allows developers to use existing Ethereum dApps on Polkadot; Chainlink’s oracle technology and Polkastarter’s decentralized exchange platform, in a growing number of use cases, are included in the Polkadot ecosystem. This contributes to the value and utility of the network and the DOT token needed to establish, secure, or interact with Polkadot Parachains over time.

Roadmap

• PoA: Polkadot acts as a chain of proof of authority (PoA) maintained by the founders of the Web3 foundation. The chain only allows the user to request a Dot token or send an authentication request. Web3 launches Polkadot in Proof of Authority mode.
• Npos: In Proof of Stake, the network will run with a decentralized validator. During this phase, Web 3 uses sudo to increase the authentication process. When web3 is confident it’s working properly -> Sudo Key will introduce an upgrade runtime to enable Polkadot’s administration.
• Governance and quit sudo: Polkadot is enabled, it can elect the first Council and Technical Committee and start accepting proposals publicly.
• Enable balance transfers: Polkadot allows balance transfers.

Before being activated by Polkadot’s network administrator, the parachains will be tested and optimized on both the testnet and Kusama parachains. Once the code has been fully tested, audited, and evaluated and the parachains are running smoothly on Kusama, the Polkadot admin can activate the parachains and start auctioning the parachain location. Parachain slots will be auctioned off one by one, with each auction lasting approximately two weeks.

Future upgrade (Q1-Q3 2022)

Polkadot upgrades currently in development include an upgrade to XCMP (Cross-Chain Messaging) and the launch of parathreads

Economics and Supply

Key metrics

• Token Name: Polkadot.
• Ticker: DOT.
• Blockchain: Binance Smart Chain (BSC).
• Token Standard: Bep-20.
• Contract: 0x7083609fce4d1d8dc0c979aab8c869ea2c873402
• Token Type: Governance, Utility.
• Total Supply: 1.103.303.471 DOT
• Circulating Supply: 987.579.315 DOT

Token Allocation

Token use cases

• Governance: Decision power in the network will be based on the proportion of tokens held by users.
• Staking: Users can stake DOT in pools for a chance to receive regular interest returns.
• Bonding: DOT is used to connect parachains auction, when the auction project is successful, this DOT number will be locked.
• Fee: When parachains need to communicate and transfer data with each other, the system will charge fees in the form of DOT.

How to own the token?

Dot is currently being traded on most major exchanges in the world, including Binance, MEXC, Gate, Coinbase, Kucon, Huobi, Bybit,…

Backers

Team

• CEO – Dr. Gavin Wood: Co-founder and former CTO of the Ethereum blockchain network. Co-founder of Parity Technology. He is the founder of the Blockchain industry, who contributed to the development of the Solidity language. Gavin is also the chairman of the investment fund Web3 Foundation.
• Robert Habermeier: This Polkadot co-founder is a member of the Thiel Fellow, the investment fund of Silicon Valley magnate Peter Thiel, who is the godfather of the social networking platform Facebook.
• Peter Czaban: Peter is currently the CTO of the Web3 Foundation. He holds a master’s degree from Oxford University in computer science with a particular focus on Machine Learning.

Cooperation

Polkadot is designed to work with public, private, and enterprise chains. Polkadot looks forward to working closely with the following partners to develop the first use cases and looks forward to collaborating with other blockchain projects looking to adopt the technology.

Organization that supports Polkadot

Web3 Foundation has commissioned Parity Technologies to build Polkadot.
Founded by Ethereum co-founder Dr. Gavin Wood and former Ethereum Foundation Head of Security Dr. Jutta Steiner, Parity is a global team of top distributed systems engineers, cryptographers, solutions architects and researchers. Parity has fundamentally shaped the blockchain industry, from building the highly-adopted Parity Ethereum client and implementations of Bitcoin and Zcash, to developing the next generation of blockchain technology with Substrate and Polkadot.

Conclusion and analysis

Polkadot’s ecosystem is also building itself an Ethereum-like empire spanning many areas in the DeFi industry such as Acala, Phala, Bifrost, Polkastarter, Moonbeam, or even a remarkable Wallet ecosystem like Math Wallet, Cobo Wallet…This shows that Polkadot’s ambition is not small.

Polkadot goes in the direction of connecting with Bridge instead of competing for the ecosystem like in Ethereum 2.0. It wants to support other Blockchain platforms, extend the DeFi cross-chain network, improve the user experience. Promisingly, in the near future, more and more Blockchains will connect and find POLKADOT.

Unspecified to be the “next Ethereum” or the “Ethereum killer” or a competitor to other networks, Polkadot rejects the idea that there should be only one blockchain. It brings a new era of cross-chain interoperability, complementing the broader crypto ecosystem to increase the utility of web3, instead of the previous series of standalone protocols. A vast ecosystem has begun to launch and expectations for its future are huge.

It can be said that the potential of Polkadot is huge. However, Polkadot needs to accelerate development time as well as expand the attraction of projects even faster on its platform as Ethereum itself and other ecosystems are also in a race to expand the network blockchain with layer 2.

Find more information about Polkadot:

Website: https://polkadot.network

Twitter: https://twitter.com/Polkadot

Discord: https://discord.com/invite/wGUDt2p

Youtube: https://www.youtube.com/channel/UCB7PbjuZLEba_znc7mEGNgw

Reddit: https://www.reddit.com/r/polkadot

If you have any questions, comments, suggestions, or ideas about the project, please email ventures@coincu.com.

Naooasuzuki

CoinCu Ventures