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What is Polkadot?

Recently, many users and investors are interested in knowing about Polkadot, because now that this text is being written, this project has increased in price by more than 40%, and therefore it has met with good luck. In this text, we have tried to collect everything you need to know about Polkadot.

Polkadot is a next-generation blockchain protocol which connects multiple blockchains into one network. It is built as part of a broad vision for a web that returns control to individuals over internet monopolies, and builds on the revolutionary promise of previous blockchains. It provides many fundamental advantages that we briefly introduce:

Scaling

Blockchains in isolation can process just a limited amount of traffic. Polkadot is a sharded multichain network, which means that it can process many transactions on several chains in parallel, eliminating the bottlenecks that happened on legacy networks that processed transactions one-by-one. This parallel processing power improves extremely scalability and creates the right conditions for increased adoption and growth in future. Sharded chains connected to Polkadot are called “parachains” as they run on the network in parallel.

Specializing

In blockchain architecture, one size does not fit all. All blockchains make tradeoffs to support various features and use cases. On Polkadot, each blockchain can have its design optimized for a particular use case. As a result blockchains can provide better services, and improve efficiency and security by leaving out unnecessary code. Building on the Substrate development framework enables teams to develop and customize their blockchain faster and more efficiently than ever before possible.

Working together

Networks and apps on Polkadot can share information and functionality, without any need to rely on centralized service providers with questionable data practices. Previous networks operated largely as standalone environments, but Polkadot offers interoperability and cross-chain communication. This gives the ability to innovative new services and transfer information between chains. So, for instance, a chain that provides financial services can communicate with another that provides access to real-world data such as stock market price feeds for tokenized equities trading.

Self-governing

One of the important advantages of Polkadot is that communities on it govern their network as they see fit, and hold a transparent stake in the future of its network governance as a whole. Teams customize and optimize their blockchain’s governance to their needs, experiment with fresh ideas, or swap in pre-built modules for faster deployment. Blockchain governance models can even be perfected and upgraded as needs and conditions change gradually.

Upgrading easily

Like all software, blockchains have to be upgraded and they need to stay relevant and improved over time. However, upgrading conventional chains need a what are called “hard forks”, which create two separate transaction histories that can splinter a community in two and often take several months of work. Polkadot enables forkless upgrades, so blockchains can evolve and adapt easily as better technology becomes available.

Who are founders?

Robert Habermeier

Robert Habermeier is a Thiel Fellow and co-founder of Polkadot. He is an expert in research and development of blockchains, distributed systems, and cryptography. A longtime member of the Rust community, he has focused on leveraging the language’s features to create highly parallel and performant solutions.

Dr. Gavin Wood

Gavin started originating blockchain technology as co-founder and CTO of Ethereum. He invented fundamental components of the blockchain industry like Solidity, Proof-of-Authority consensus, and Whisper. At Parity, Gavin currently leads innovation on Substrate and Polkadot. He coined the term Web 3.0 in 2014 and works as President of Web3 Foundation.

Peter Czaban

Peter is the Technology Director of the Web3 Foundation, and works on supporting the development of the next generation of distributed technologies. He obtained his Masters of Engineering degree at the University of Oxford, reading Engineering Science where he focused on Bayesian Machine Learning. He has been working working across defense, finance and data analytics industries, mesh networks, distributed knowledge bases, quantitative pricing models, machine learning and business development.

Polkadot’s native token; DOT

DOT is the token native to the Polkadot network that is designed to carry out the key functions of the platform, including providing governance for the network, operating the network, and creating parachains by bonding DOT.

The first function of DOT is to entitle owners to complete governance control over the platform. So they can determine the fees of the network, the auction dynamics and schedule for the addition of parachains, and exceptional events like upgrades and fixes to the Polkadot platform. These functions are not formally granted to holders, but rather the underlying code of Polkadot will allow DOT holders to participate in governance.

The second function will be to facilitate the consensus mechanism that underpins Polkadot. In order for the platform to function and allow for valid transactions to be carried out across parachains, Polkadot will rely on DOT participants to play active roles. Participants will put their DOT at risk (“staking” or “bonding”) to perform these functions, which acts as a disincentive for malicious participation in the network. DOT required to participate in the network will depend on the activity undertaken, the duration DOT is staked for, and the total number of DOT staked.

The third function is the ability to add new parachains by tying up DOT (referred to as “bonding”). The DOT will be locked during their bonding period and will be released back to the account that bonded them after the duration of the bond has elapsed and the parachain is removed.

Polkadot Wallets

The integration of a wallet with Polkadot provides simple and easy access to private keys and signing transactions. Below are some wallets that support Polkadot along with their development statuses.

Note that inclusion does not necessarily imply endorsement of that wallet. Polkadot support can provide assistance with issues related to Polkadot-JS, the Polkadot{.js} extension, or Parity Signer. For other wallet software, you should contact the developers of that wallet.

Encryption Enhancement

Some recently generated JSON account files cannot be imported (restored) into older wallet software. This is because of an enhanced encryption method, which is also noticeable in a slight delay when encrypting/decrypting your wallet. If you are can’t load a JSON file, please ensure that you are using the latest version of the wallet software. If you are still unable to load it, ensure that the wallet software is using the latest version of the Polkadot API.

Supported Wallets
Wallet Name Development State Team Name Description
Signer Live Parity IOS and Android
Polkadot-JS Live Parity Browser
Polkadot{.js} Live Parity Browser extension
Polkawallet Live Polkawallet IOS and Android
Math Wallet Live Math Wallet IOS, Android, Browser extension
Trust Wallet Live Trust Wallet IOS and Android
ImToken Live ImToken IOS and Android
Ownbit Live Ownbit iOS and Android
AirGap Live AirGap IOS, Android, MacOS, Windows and Linux
SafePal Live SafePal IOS, Android, and Hardware
Crypto.com Live Crypto.com IOS and Android
Ledger App Live Zondax Hardware
Atomic Wallet Live Atomic Wallet Desktop
Dether Live Dether IOS and Android
Cobo Wallet Live Cobo IOS and Android
Swipe Live Swipe IOS and Android
Guarda Live Guarda IOS, Android, MacOS, Windows, Linux, and Browser extention
Mixin Live Mixin iOS and Android
Fearless Wallet Live Soramitsu iOS and Android
ONTO Wallet Live Ontology iOS, Android, and Browser extention
Polkadot{.js} (EthWorks) Building EthWorks Browser extension
MetaMask Building MetaMask IOS, Android, and browser extension
Speckle Building Speckle Browser extension
KodaDot Building Geefu Browser
Subwallet Building yxf CLI Wallet
Spatium Building Spatium IOS and Android
TokenPocket Building TokenPocket IOS and Android

 

Architecture of Polkadot

Polkadot is a heterogeneous multichain with shared security and interoperability.

Relay Chain

Central chain of Polkadot is called the Relay Chain. All validators of Polkadot are staked on the Relay Chain in DOT and validate for the Relay Chain. It is composed of a relatively small number of transaction types that include ways to interact with the governance mechanism, parachain auctions, and participating in NPoS. The Relay Chain has deliberately minimal functionality – for example, smart contracts are not supported. The major responsibility is to coordinate the system as a whole, including parachains. Other specific work is delegated to the parachains, which have differing implementations and features.

Parachains and Parathreads

Most of the computation that happens across the Polkadot network as a whole will be delegated to specific parachain implementations that handle different use cases. Polkadot places no constraints over what parachains can do besides that they must be able to generate a proof that can be validated by the validators assigned to the parachain. This proof verifies the state transition of the parachain. Some parachains may be specific to an specific application, others may focus on specific features such as smart contracts, privacy or scalability — still others might be experimental architectures that are not necessarily blockchain in nature.

To remain connected to the Relay Chain, parachains have to win a parachain slot auction to secure a slot for a particular length of time. Parathreads do not remain connected, but must win auctions for individual blocks. There is thus an economic difference between parathreads and parachains. Parachains will have to bond a large up-front deposit for the right to connect to the Relay Chain; parathreads will pay on a per-block basis. Parathreads can become parachains, and vice-versa.

Shared Security

Parachains connected to the Polkadot Relay Chain all share in the security of the Relay Chain. Polkadot has a shared state between the Relay Chain and all of the connected parachains. If the Relay Chain has to revert for any reason, then all of the parachains would also revert. This is to ensure that the validity of the entire system can persist and no individual part is corruptible.

The shared state makes it so that the trust assumptions when using Polkadot parachains are only those of the Relay Chain validator set, and no other. Since the validator set on the Relay Chain is expected to be secure with a big amount of stake put up to back it, it is desirable for parachains to benefit from this security.

Roles

Validators

Validators, if elected to the validator set, create blocks on the Relay Chain. They also accept proofs of valid state transition from collators. In return, they will receive staking rewards.

Collators

They are full nodes on both a parachain and the Relay Chain. They collect parachain transactions and produce state transition proofs for the validators on the Relay Chain. They can also send and receive messages from other parachains using XCMP.

Nominators

Nominators bond their stake to specific validators in order to help them get into the active validator set and thus produce blocks for the chain. In return, nominators are normally rewarded with the portion of the staking rewards from that validator.

Governance

Polkadot uses a sophisticated governance mechanism that enables it to evolve gracefully over time at the ultimate behest of its assembled stakeholders. The final goal is to ensure that the majority of the stake can always command the network.

To do this, it brings together different novel mechanisms, including an amorphous state-transition function stored on-chain and defined in a platform-neutral intermediate language and some on-chain voting mechanisms like referenda with adaptive super-majority thresholds and batch approval voting. All changes to the protocol need to be agreed upon by stake-weighted referenda.

Mechanism

To make any changes to the network, the idea is to compose active token holders and the council together to administrate a network upgrade decision. No matter whether the proposal is proposed by the public (DOT holders) or the council, it eventually will have to go through a referendum to let all DOT holders, weighted by stake, make the decision.

Referenda

Referenda are referred to simple, inclusive, stake-based voting schemes. Each referendum has a specific proposal associated with it that takes the form of a privileged function call in the runtime (that includes the most powerful call: set_code, which can switch out the entire code of the runtime, achieving what would otherwise need a “hard fork”). They are discrete events, have a fixed period where voting takes place, and then are tallied and the function call is made if the vote is approved. Referenda are always binary; your only options in voting are “aye”, “nay”, or abstaining entirely.

Referenda can be started in one of multiple ways:

  • Publicly submitted proposals;
  • Proposals submitted by the council, either through a majority or unanimously;
  • Proposals submitted as part of the enactment of a prior referendum;
  • Emergency proposals submitted by the Technical Committee and approved by the Council.

All referenda have an enactment delay which is associated with them. This is the period of time between the referendum ending and, assuming the proposal was approved, the changes being enacted. For the first two ways that a referendum is launched, this is a fixed and certain time. For Kusama, it is 8 days; in Polkadot, it is 28 days. For the third type, it can be set as desired.

Emergency proposals deal with major problems with the network that have to be “fast-tracked”. These will have a shorter enactment time.

Council

To represent passive stakeholders, Polkadot has the idea of a “council”. The council is an on-chain entity comprising some actors, each represented as an on-chain account. On Polkadot, the council consists of 13 members. This is expected to rise over the next few months to 24 seats. Generally, the council will end up having a fixed number of seats. On Polkadot, this will be 24 seats while on Kusama it is 19 seats.

Along with controlling the treasury, the council is called upon primarily for three tasks of governance: proposing sensible referenda, cancelling uncontroversially dangerous or malicious referenda, and electing the technical committee.

For a referendum to be proposed by the council, a strict majority of members need to be in favor, with no member exercising a veto. Vetoes may be exercised only once by a member for any single proposal; if, after a cool-down period, the proposal is resubmitted, they may not veto it a second time. Council motions which pass with a 3/5 (60%) super-majority – but without reaching unanimous support – will move to a public referendum under a neutral, majority-carries voting scheme. In the case that all members of the council vote in favor of a motion, the vote is unanimous and becomes a referendum with negative adaptive quorum biasing.

Technical Committee

The Technical Committee was introduced in the Kusama rollout and governance post as one of the chambers of Kusama governance (along with the Council and the Referendum chamber). The Technical Committee consists of the teams that have successfully implemented or specified either a Polkadot/Kusama runtime or Polkadot Host. Teams are added or removed from the Technical Committee via simple majority vote of the Council.

The Technical Committee is able to, along with the Council, produce emergency referenda, which are fast-tracked for voting and implementation. These emergency referenda are intended for use only under urgent circumstances.

Fast-tracked referenda are the only type of referenda that can be active alongside another active referendum. Thus, with fast tracked referenda it is possible to have two active referendums simultaneously. Voting on one does not prevent a user from voting on the other.

Examples of what teams are building on Polkadot

Polkadot’s key features open a world of possibility for new services that put people back in control of their own digital lives. Several teams are already building impactful solutions for Polkadot for a range of applications, such as finance, gaming, digital identity, IoT, supply chain management, social networking and cloud technologies. Web3 Foundation, which is the organization responsible for stewarding the development of Polkadot, supports many of these teams with grants, funding projects at all levels of the web3 technology stack, from low-level infrastructure to ecosystem components like wallets, parachains, bridges and tooling

Since its establishment, the Polkadot ecosystem is growing larger and more robust as teams realize the benefits and efficiency of deploying their project to Polkadot. Polkadot’s unique design gives projects more possibilities for innovation and flexible iteration than was ever possible in other networks. By bringing different specialized chains together into one scalable unified network, Polkadot enables blockchain technology to reach its full potential for real-world use cases, giving rise to new markets and paving the path for future decentralized economies.

Smart contract chains with WebAssembly smart contracts (EdgewareCharred Cherry testnet).

Data curation networks that connect all file storage chains into curated data sets (Ocean Protocol).

Oracle chains which make off-chain data available to all contracts on the Polkadot network (ChainLink).

Identity chains which link accounts to a persistent identity and enable access to other parachains through fewer accounts (Speckle OS).

Financial chains that enables you to hold all your assets in one portfolio, including via bridges to Bitcoin, Ethereum, Bitcoin Cash, Litecoin and ZCash (ChainXKatallassos).

Internet of Things chains that set IoT standards for machine-to-machine communication (MXC Protocol).

Zero Knowledge privacy chains, or bridges to existing ZK-snarks chains (e.g. Zerochain).

File storage chains that incentivize storing data on-chain.

Bridge to Ethereum which enables Ethereum smart contracts to interact with the Polkadot network.

Polkadot roadmap

The Polkadot network had a phased roll-out plan, with key milestones toward decentralization marking each phase.

The PoA Launch

The Genesis block of the Polkadot network was launched on May 26, 2020, as a Proof of Authority (PoA) network. Governance was restricted to the single Sudo (super-user) key, that was held by Web3 Foundation to issue the commands and upgrades necessary to complete the launch process. During this time, validators began joining the network and signaling their intention to participate in consensus.

Nominated Proof of Stake

Once Web3 Foundation was confident in the stability of the network and there was enough number of validator intentions, Web3 Foundation used Sudo – a superuser account with access to governance functions – to initiate the first validator election. After this election, the network transitioned from PoA into the second phase, Nominated Proof of Stake (NPoS), on June 18, 2020.

Governance

After the chain had been running well with the validator set, the Sudo key issued a runtime upgrade that allowed the suite of governance modules in Polkadot; namely, the modules to enable a Council, a Technical Committee, and public referenda.

Removal of Sudo

The Sudo module was removed by a runtime upgrade on July 20, 2020, transitioning the governance of the chain into the hands of the native token (DOT) holders.

From this point, the network has been completely in control of the token holders and is no longer under control of any centralized authority.

Balance Transfers

To enable balance transfers, Polkadot community made a public proposal for a runtime upgrade that lifted the restriction on balance transfers. Transfer functionality was subsequently enabled on Polkadot at block number 1,205,128 on August 18, 2020, at 16:39 UTC.

Redenomination

On August 21, 2020, redenomination of DOT, the native token on Polkadot, took place. From this date, one DOT (old) equals 100 new DOT.

Core Functionality

Polkadot is now heading to the next stage of opening up its core functionality, such as parachain slot auctions, parathreads, and cross-chain message passing. These upgrades will need runtime upgrades that will pass through Polkadot’s normal governance processes. The core functionality does not have to be unlocked sequentially — several features can be unlocked with a single proposal.

Polkadot 2.0

With the release of Polkadot 1.0, researchers have started research for the next version of the Polkadot network. With many questions yet to be answered, currently, some big areas of research will be in:

  • Economics and Networking (Zero-Knowledge): How will scalability work in Polkadot 2.0?
  • Horizontal vs. Vertical scalability: What is the breaking point of the maximum number of parachains built with horizontal scalability?
  • Nested Relay Chain: How can multiple Relay Chains exist connected through parachains? How many tiers of Relay Chains can be nested? How will validators work together to validate blocks on various Relay Chains? How is XCMPworking in the nested setup? How AnV will work there