The Polkadot name has been in common usage for a long time now. You might have heard it generally or you might have heard that a certain project is building on it. But, what is Polkadot and why do you hear the name often nowadays? Let’s dive in.
Simply put, Polkadot is a bridge to connect different blockchains. Launched in 2016 and run by the Web3 foundation, it’s founders are Gavin Wood, Rober Habermeier and Peter Czaban. Due to it’s importance and the development activity happening on it, Polkadot has become a commonly known blockchain project.
It’s a sharded protocol facilitating communication between different blockchains, allowing them to transfer value across and to combine their security together. Polkadot makes blockchains operate as if they are one network and hive minded.
Built on Parity’s Substrate framework, it’s state machine is compiled with WebAssembly (WASM) and utilizes libp2p for peer discovery as well as communication. Polkadot philosophy is openness, inclusiveness and collaboration. The design principles are minimalism, simplicity, generality and robustness.
Advantages Of Polkadot
Polkadot offers a wide number of benefits for the blockchains and their users. These include, but aren’t limited to:
Compatibility: The network is coded with Golang, C++ and Rust to ensure compatibility with existing infrastructure.
Scalability: It can connect a large number of blockchains, which are called parachains, within the context of the Polkadot network.
Consensus Mechanism: Polkadot is able to connect different blockchains with different consensus mechanisms, as such it’s own consensus mechanism is open and flexible.
Security: It can help blockchains pool security between each other, so an adversary faces a strong network.
Transaction: It’s possible to send transactions to different blockchains and thus transfer across.
Governance Mechanism and Upgradeability: Polkadot has a formal governance mechanism and can upgrade without having to hard fork.
The platform’s native token is DOT, which recently underwent a 100:1 token split. The total supply of DOT is 1,063,769,823 (or 1.06B). It is used for all activities on the network particularly governance (as voting power), staking (risking tokens to validate activity) and bonding (addition of new parachains).
Polkadot Governance And Staking
Polkadot has an advantage in the sense that unlike most other blockchains, it’s governance mechanism isn’t left to speculation and informal decision making. DOT holders have governance and voting powers. They can decide on important matters such as upgrades, fees, auctions, adding parachains, maintenance, fixes, upgrades etc.
The network utilizes the Nominated Proof of Stake (NPOS) consensus mechanism to process activity on the network and ensure that all stakeholders on the blockchain state. The token holders can nominate a validator on their behalf and receive rewards in DOT tokens for serving the network. The requirements are variable.
Basic Network Roles
Validator: Verify and accept new blocks, propose new blocks, need to deposit stake corresponding to which they can process activity.
Nominator: Nominate validators with stake, receive rewards for participating indirectly.
Collators: Help the validators in proposing blocks, run full nodes, able to see network activity, prioritize transactions according to fees paid, batch and give them to validators.
Fisherman: Guard the network and detect malicious network activity, need to stake capital also.
Relay Chain: Relay chain is responsible for connecting different blockchains, providing security, interoperability and consensus.
Para Chain: Different blockchains with their own assets and purposes, differing in parameters and optimizations, onboarding Polkadot directly.
Bridges: Required for connection with external blockchains like Bitcoin and Ethereum etc.
Polkadot hasn’t deployed completely yet and it’s still in development phase. The current phase is Parachain Rollout – beginning of parachains rollout and slot lease auctions. Before this, Polkadot deployed Proof of Authority (PoA) – staking and DOT tokens claim.
Then, after validators onboarding and network stability, they deployed NPOS (Nominated Proof of Stake) allowing nomination and indirect network support.The network later transferred the governance to the community and then removed the admin key with ability to override network parameters.