5 Key Benefits of Building on Polkadot
The decentralization revolution is brewing and it’s only a matter of time before it takes over. As a developer or social entrepreneur, you may have looked at this revolution and thought to join in.
But then as soon as you accepted this thought, you were bamboozled by the many decisions that lay in front of you. Do you build a blockchain or a decentralized application? Which ecosystem should you build on? Should you create another standalone blockchain and deal with the struggle of creating a whole new ecosystem from scratch? Where would you get funding? How would you get users? What of the validators needed to mine blocks?
On and on you think, trying to make the best decision so you don’t regret it later. You don’t want to be limited in your vision, scope, or execution. You want to be able to build fast and easily. And most importantly, you want access to quick funding and seamless deployment. All in all, you want the perfect solution for building your blockchain or smart contract. But then, is there such a thing as the best platform/ecosystem?
Although there may never be the perfect thing for anything (because life is inherently wrought with inconsistencies that always upgrade over each other), there is such a thing as ‘good enough’ — or if you’re feeling ambitious, ‘pretty damn kick ass’. When it comes to deciding which ecosystem to host your blockchain project on, Polkadot is more than good enough and I will explain why by illuminating the 5 key benefits of building on Polkadot.
First, we shall begin with a brief overview of the system before diving into the benefits of building on it.
A brief introduction to Polkadot — wherein there's talk of interoperability
At its core, Polkadot is a proof-of-stake blockchain that connects other blockchains. That’s all there is to it. Now you may be wondering why connecting blockchains is such a big deal.
Well, contrary to what many Bitcoin and Ethereum maximalists may have you believe, the future of decentralization is multi-chain. As in, it’s not likely that there will be only one primary blockchain that all the others will depend on. Instead, every blockchain will work in collaboration with other blockchains, such that there will be many blockchains with specific functions and users. This reality is already before us as there more than 10 permissionless blockchains currently live (Bitcoin, Ethereum, THORchain, Terra, and EOS to name a few). As such, the next frontier in blockchain execution is finding the most seamless way to connect the different blockchains so that rather than have 100 siloed ecosystems, we will have 1 mega ecosystem made up of 100+ interconnected mini-ecosystems. This connection is mostly referred to as interoperability and it was the dream that underpinned the vision of Polkadot.
Another notable project tackling the issue of interoperability is Cosmos. The difference between the two is in the way the ecosystems are designed — from consensus to interoperability. Pointing out the similarities and differences is beyond the scope of this article, but for a more detailed read, you can check out this 92-mins article.
Back to Polkadot.
Polkadot achieves interoperability by using the concept of a relay chain and parachains. The relay chain fulfills two main purposes:
- Ensure maximum network security
- Enable seamless interoperability between chains
In this sense, the relay chain is the base layer, relaying information between all the blockchains that are connected to it. Imagine it as a circular pipe with holes at various sections for other pipes to connect to.
The parachains are the blockchains that connect to the relay chain. The below diagram should make it easy to understand.
One of the key benefits of this design is that information transfer between parachains is seamless. This is because both the blockchain and the parachains speak the same language (in a sense), and as such, can speak to each other without the need for any middlemen.
Imagine if Ethereum could easily plug into Bitcoin. The applications that could be built leveraging the resources of both chains would supersede what each chain could build on its own. DeFi (decentralized finance) grew to such great heights ($50 billion in total value locked in under 15 months), because Ethereum enabled seamless interactions between smart contracts, leading to fascinating new use-cases and a bull cycle (for the investment-minded folks).
Things work better together, and blockchains are no exception to this rule. If you think of each blockchain as an internet service, then it becomes easier to envision. One deals with identity, another with content, the other banking, another gaming, privacy, interoperability, etc. The possibilities become endless, like the current internet.
The future is multi-chain and so the wise thing to do is to plan with interoperability in mind. To think that one chain sitting in isolation can achieve this scale of interoperability is naive at best. Thankfully, Polkadot offers a novel path to this future.
Interoperability on Polkadot is achieved in two ways:
- If two parachains want to speak to each other, they communicate using the cross-chain message passing (XCMP) feature enabled by the relay chain.
- If a parachain wants to talk to a blockchain that’s outside the Polkadot ecosystem, it will communicate with another specialized parachain called a bridge. The bridge works like a telephone company, helping the parachain connect to a blockchain outside the Polkadot ecosystem.
As such, no parachain in the Polkadot ecosystem is barred from speaking to other blockchains. This feature will be paramount in the multi-chain future that is before us.
However, interoperability isn’t the only reason why Polkadot is worthy of your consideration. Below are five key benefits of building on Polkadot.
5 key benefits of building on Polkadot
1. Vibrant ecosystem
To say the Polkadot ecosystem is vibrant is to say that water is wet. With parachain auctions around the corner, new projects are announcing every week. As of the end of March 2021, there were already over 400+ projects building on Polkadot.
Despite this already large number, the Web3 Foundation is still handing out grants on a quarterly basis with plans to continue for at least two more years (although it’s not only Polkadot projects that get grants).
As such, regardless of user adoption in the next 12–24 months, what’s guaranteed is that there will be a steady supply of projects to partner with (as can be seen via the myriad partnership announcements between Polkadot projects). This means that there will be a large number of skilled developers working within the Polkadot ecosystem, ensuring that the knowledge base for building in the ecosystem will be large and detailed such that you will rarely face an impossible implementation problem that can’t be fixed via seeking more knowledge.
2. Shared security that enables quick deployment
Given that Polkadot runs a nominated-proof-of-stake scheme (where any user can nominate validators to validate transactions on their behalf and earn rewards), shared security means that all DOTs staked in the system are essentially backing all the projects in the ecosystem. The alternative is to have every project try to bootstrap their own security with their validators, nominators, and a token with a large market cap. (Technically, you still need to do all these things, but with Polkadot, the time taken is truncated by a considerable margin).
For some projects and teams, this is a nice problem to have. However, if you are one of the many, then chances are you need help with the security bit. Rather than bootstrap your security from the ground up, you can leverage the security of the Polkadot relay chain.
When a parachain connects to Polkadot, the Relay Chain validator set become the securers of that parachain’s state transitions. The parachain will only have the overhead of needing to run a few collator nodes to keep the validators informed with the latest state transitions and proofs/witness. Validators will then check these for the parachains to which they are assigned. In this way, new parachains instantly benefit from the overall security of Polkadot even if they have just been launched — Polkadot Wiki
This takes a lot of burden off you while guaranteeing premium security for your project.
Because all projects building on Polkadot are essentially pooling resources (via the relay chain), the cost of great security is reduced. In this way, there’s a win-win for all parties involved.
3. Robust developer tools that make building faster and easier
One of the most important facts to consider when choosing an ecosystem is how easy it will be to build in. The best ecosystems make the process of building and deploying easy and that is what Polkadot aims to be.
With access to powerful programming languages and a host of tools that have been built by the open-source community over the past few years, building on Polkadot is an experience that is only bound to get easier as the years roll by. For example, there are parachain development kits (PDKs) that have reduced the time it takes to launch a fully functional blockchain from years to weeks or days.
In case you’re unfamiliar, Rust is a multi-paradigm programming language designed for performance and safety, especially safe concurrency. Rust is syntactically similar to C++ but can guarantee memory safety by using a borrow checker to validate references.
Substrate is a framework that allows developers to develop entire blockchain applications with ease. This is accomplished by bundling core essentials such as the networking protocol, consensus layer, Wasm interpreter, and runtime modules (called pallets). Cumulus, an extension to Substrate, allows any Substrate built chain to connect to Polkadot and become a parachain— wiki.polkadot
Although Polkadot doesn’t allow you to build a smart contract on the relay chain, there are many smart contract parachains that help with this. One of the more notable ones is Moonbeam which offers unprecedented EVM compatibility, making it possible to transfer a smart contract on Ethereum to Polkadot with very minimal changes (Balancer and Sushiswap are a few notable Ethereum projects that have taken the leap).
4. On-chain governance that makes upgrading the chain easier
It is idealistic — probably naive — to build a protocol and expect that it will never require changes. Depending on the complexity of the protocol (blockchain), the need for future upgrades will be inevitable. There’s a reason why computer software is constantly updated. Because bugs, inefficiencies, or new ideas are found down the line that needs to be fixed else the system flounders.
Many Bitcoin purists believe that a protocol that can be upgraded (forked) is not a true blockchain. But then consider: isn’t life is dynamic? Is change not inevitable? Do we not make mistakes?
The goal isn’t to build a changeless system but to build one that allows trustless, accountable, fair, positive change. Positive change is that which helps the ecosystem as well as all life (I guess this is the ultimate idealism. But alas, we can’t say we’ve made a positive change if the life around us is dying. Thus, all actions should be checked against its impact on all life, not just the ecosystem in focus. Because the truth is that there is only one primary ecosystem and all other ecosystems exist within it. That ecosystem is life/the world).
Thankfully, Polkadot comes equipped with a governance process that sets the stage for a dynamic blockchain to evolve towards the greater good. By building on Polkadot, your blockchain can easily be upgraded via referenda without any need for hard forks. Further, council members can be chosen via voting, wherein anyone can become a councilor (however, this is dependent on how you choose to set up your governance process).
The struggle your project faces (including Polkadot itself) is to find a way to ensure that the governance process is not abused by a few to the disadvantage of the many. This will defeat the whole point of the decentralization paradigm.
For more information on the governance process of Polkadot, read this.
5. Crowdloan functionality that enables quick, trustless funding
Tied squarely with the on-chain governance functionality, the ability to crowdloan for a project is enabled on Polkadot, making it easy to establish not just quick, frictionless liquidity, but if used well, could ensure greater decentralization of a protocol’s tokens so that centralization is avoided from Genesis. Crowdloan functionality is achieved in two ways: either via the relay chain or via an application-specific parachain or smart contract. In the first instance, the Initial Parachain Offering (IPO) is how. The way this happens is that users bond $DOT tokens for a duration on behalf of a project. In return, the parachain (project) is expected to reward the user in their native token, NFT, or however they deem fit. In the second instance, protocols like Polkastarter, Kilt, etc. can be used to raise funds for projects by selling tokens. Any process is available to you depending on your preference.
This article has barely scratched the surface of what Polkadot is and can do. There is a wealth of information over at the Polkadot Wiki site where you can learn more about the ecosystem and how to start building. What are you waiting for? Join the decentralization revolution and interoperate towards a better future for all life.
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