Polkadot

Polkadot supports cross-blockchain transfers of data and assets, helps people build decentralized apps, and enables user-driven network governance.

Overview

Polkadot is a heterogeneous multi-chain that enables a decentralized web where users are in charge of their identity, data, and complete control of their financial activities. The sharded platform connects multiple blockchains (parachains) into a unified network, enabling cross-chain communication and interoperability.

Furthermore, the scalable decentralized platform can connect the parachains to external networks like Ethereum and bitcoin via bridges, enabling them to communicate with ease. In addition to the parachains and bridges, the relay chain completes the network’s core architecture. The Polkadot’s central chain is responsible for the network’s shared security, consensus, and cross-chain interoperability, making it the heart of the blockchain. 

The blockchain lets individuals, including governments, app developers, and organizations, build on the platform. Polkadot also enables decentralized financial (DeFi) system accessibility, providing internet-enabled users the freedom to carry out on-chain transactions without third-party interference, regardless of their nationality and status.  

Currently, the Polkadot relay chain doesn’t natively support smart contracts deployment, but the parachains can support smart contracts. Developers can deploy them to a target chain with its environment. Polkadot also doesn’t support NFTs creation. But the network community recently proposed an upgrade that’ll bring a suite of new development, including NFTs and CBDCs.

Product details

Polkadot uses the DOT token to power the blockchain. The native token serves three primary purposes: network governance, staking, and bonding. For instance, it lets holders vote on future project changes, allowing them to participate in network governance and decision-making. They can also stake their holdings to earn rewards, which helps secure the blockchain. Furthermore, DOT lets users bond their cryptocurrency (tie-up DOT for a duration) to add new parachains to the network. Additionally, the token facilitates peer-to-peer payments and the store of value.

Polkadot uses parachains, a network of heterogeneous blockchains, to achieve a multi-chain architecture. The decentralized platform connects other blockchains to form a multi-chain network (parachains) using a relay chain, the hub connecting the different chains.  The specialized and interconnected parachains give developers complete control over the underlying blockchains, giving them the flexibility and maximum freedom to optimize for any use case. In addition, the connected ecosystem allows data to flow freely between the chains, allowing more interoperable services. These features make Polkadot more than a blockchain. 

Polkadot uses a nominated proof-of-stake scheme and multi consensus roles to protect the network. The scheme lets any user nominate validators, one of the consensus roles in the network, to validate transactions on their behalf. The pooled resources allow all the staked DOTs in the ecosystem to back all the projects in the blockchain, ensuring shared security at reduced costs. Besides validators who secure the relay chain by staking DOTs and validating proofs, the other roles in consensus are nominators that help secure the network by selecting validators and staking DOTs; collators produce proofs for validators, and fishermen monitor the networks and report destructive behaviors to validators.

Polkadot relies on the GRANDPA (GHOST-based Recursive Ancestor Deriving Prefix Agreement) consensus algorithm for a more secure and resilient network. This block finality protocol decides which blocks and changes are final in the blockchain. The protocol is not responsible for producing blocks; it only imports produced blocks from validators who vote on chains and finalizes those with the maximum votes. Separating the block production and finalization lets GRANDPA finalize multiple blocks at once. It also enables a sturdy and safe blockchain system.  

Polkadot lets developers build decentralized applications (dApps) on the network. These applications run on a blockchain or peer-to-peer (P2P) network of computers instead of a single computer, making them free from the control and interference of a single authority. Other benefits of dApps include privacy protection, development flexibility, and lack of censorship. Some of what Polkadot developers are building on the blockchain are data curation networks that connect all file storage chains into curated data sets, financial chains that let users hold their assets in one portfolio, and smart contract chains.

Polkadot provides robust documentation and support that lets developers learn how to build on the network. It also contains information and guides on deploying a node and running the network. The documentation also curates the most up-to-date information on the development tools in the ecosystem. Furthermore, developers can access Kusama, the network early release and testnet, to build and deploy parachains and experiment with Polkadot’s on-chain governance and NPoS functionality in a real environment. Alongside these, the platform has a thriving community for developers. It also provides live chat to assist them in real-time.

Polkadot has a built-in transparent on-chain governance process that democratizes decision-making. The user-driven network governance system helps the blockchain achieve its next key feature. It lets all DOT holders vote for council members, referenda, and upgrade proposals. This feature enables the majority of the stakeholders to command the network and have a say in its governance. Polkadot’s two governance roles, council members and technical committee work actively to administer network upgrade decisions. The council has 13 members elected to represent passive stakeholders in proposing referenda and vetoing dangerous or malicious referenda. Conversely, the technical committee can propose emergency referenda. It consists of teams actively building on the network.

Polkadot can upgrade the network without any need for hard forks. The forkless upgrade feature lets the network integrate new features or fix bugs, adapting quickly to changes as better technologies become available. The upgrade works based on the results of governance actions. For instance, if members vote to implement an upgrade, the meta-protocol changes the platform’s protocol to deploy the code. But nothing happens if they vote against the proposal. So no one is responsible for implementing an upgrade. Instead, the network has the proposal already written in the meta-protocol language, allowing it to execute forklessly when a voting outcome is positive. 

Recap 

Polkadot is a scalable, interoperable, and secure network powering arguably the best community-driven on-chain governance blockchain. The governance process lets active token holders vote on upgrade proposals. Polkadot uses DOT, its native token, to facilitate peer-to-peer transactions and secure the network through staking. The platform interconnects multiple heterogeneous parallel chains to form a multi-chain blockchain. The decentralized network is free from third-party interference and regulatory measures. It’s open to any person with an internet connection.