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How Does Polkadot Scale?

There are many scalability challenges that have hindered other blockchains, leading to high transaction charges and slow transaction speeds due to clogged networks. Polkadot’s network intends to resolve this scalability problem by introducing its parachain model that makes transactions trustless, fast, and decentralized. This article will go over Polkadot’s architecture and explain what makes it different from other blockchains.

What Is Polkadot?

Polkadot is a decentralized, secure, and scalable cross-chain network in the hopes of becoming the hub for Web 3.0. The blockchain is built using Substrate — a framework that enables the creation of purpose-oriented and compatible blockchains comprising pre-built or custom components. The Substrate framework gives Polkadot flexibility to accept and deliver transactions from any custom-built blockchain.

Any project built with Substrate can be easily integrated into the Polkadot network

Ethereum’s former CTO, Gavin Wood, designed Polkadot to link consortium and private chains, permissionless public networks, future technologies, and oracles. It brings interoperability to blockchains, thereby substantially increasing the network’s scalability, blockchain extensibility, and speed.

The Polkadot Network Structure

The Polkadot network runs on a shared model that is similar to ETH 2.0 Proof of Stake (PoS) model. When discussing the Polkadot network, the main elements of the network are the parathreads, the relay chain, and the parachains. A parachain is nothing more than an individual blockchain that is linked to the Polkadot network.

Since parachains are their own individual blockchains processing their own transactions, they decrease the clutter of transactions that could pile up on Polkadot’s native chain. This promotes horizontal scalability, instead of vertical scalability that is found on a network like Ethereum. Parachains on the Polkadot network are usually optimized for use in specific cases. The parachains on Polkadot are themselves scalable, enabling them to handle most of the network’s computation. This solves the scalability issues that can be found in other blockchains, such as Ethereum. This also solves some of the centralization issues found in blockchains like Binance Smart Chain (BSC).

Horizontal Scaling with Parachains

Parachains are their own independent blockchains — every parachain in the network has a unique architecture, has its own users and governance mechanism, runs its own ledger, and adds its own transactions in blocks to its blockchain. As long as a parachain adheres to the Relay chain and compiles in the WebAssembly programming language, it can link to the Polkadot network and take advantage of Polkadot’s Relay Chain.

Every parachain connects to the Relay Chain, allowing interoperable networks

Polkadot’s Relay Chain serves as the primary chain in the network. The relay chain handles the network’s cross-chain interoperability, consensus, and security. It connects all parachain states into a single state. Each scalable parachain connected to the Polkadot network has relay chain validators to validate and accept each and every block coming from the parachain.

Parachains propose and assemble blocks to validators on the relay chain, where the blocks go through intensive validity and availability checks. Once the blocks are approved, they’re added to the respective parachain, and the validators are randomly exchanged for the subsequent block. This constant check ensures transparency while never compromising the scalability or speed of the network.

Furthermore, the Polkadot network has bridge parachains that provide two-way compatibility. Bridges facilitate trustless transactions between independent blockchains and the Polkadot network, thus offering true interoperability. Thanks to these bridges, one can easily transfer some of his assets present on the ETH, SOL, MATIC, or other blockchains to the Polkadot network with ease. Pendulum’s Spacewalk bridge will connect any substrate chain to the Stellar network.

Parathreads are an alternative to parachains. They temporarily participate on the Polkadot network on a block-by-block basis, without needing to be a full parachain. This lets protocols access network security without the cost commitment and time of leasing a dedicated slot. This assists in further scaling solutions for the network, allowing scarce parachain slot resources to be distributed among competing parathreads as needed.

Polkadot Roles

The Polkadot network utilizes Nominated Proof-of-stake (NPoS) consensus mechanism, with the roles of collators, nominators, validators, and fishers to optimize chain security.

Validators make the network secure by:

  • Performing full authentication of the relay chain
  • Staking DOT to run validating nodes
  • Participating in consensus with other validators to determine the actual network state
  • Validating parachain transactions
  • Adding new blocks to the relay chain

Validators do all of these tasks in exchange for DOT rewards. All validators on the network earn rewards equally, no matter their stake. This setup also enables the Polkadot network to consume much less energy compared to BTC, ETH or even Solana.

Collators perform the following functions:

  • Maintain the entire node history for their specific parachain and relay chain
  • Aggregate parachain transactions to come up with parachain block candidates for validators to authenticate
  • Perform XCMP cross-chain messaging, allowing people to send messages between different parachains

Fishers perform the same function as collators by acting as parachain full nodes. However, they perform a separate policing role — keeping a close eye on the collator process to detect invalid transactions and reporting them to validators. If the fishers are wrong, they can lose their required role stake on the relay chain. If they’re proven right, they earn a reward.

Lastly, nominators are individuals who hold DOT tokens but aren’t interested in bearing the responsibility and cost of other network roles. Nevertheless, they assist in securing the relay chain by choosing good validators and staking their DOT onto other validators.

Nominators usually get a portion of the staking rewards. This compels users to participate in network security actively. However, nominators have to be careful when selecting which validators they will stake their DOT on. They risk losing a percentage of their staked DOT if the validators misbehave — attack the network, run modified software, or go offline.

What Makes Polkadot Different

The Polkadot network is different from other leading networks because of how it has been successful in scaling its blockchain network through sharding. Sharding is when a network can execute multiple transactions at the same time in parallel, through different shards. As the number of shards increases, throughput increases dramatically, while cross-chain functionality facilitates the transfer of assets and data between parachains.

Sharding allows multiple computations to be performed in parallel

Polkadot’s scaling solution is mainly thanks to its parachain architecture. Parachains facilitate the connection and scaling between consortium, public, and private blockchains. The network also gets scalability through dozens of natively interconnected chains and bridges to external ecosystems.

Wrap Up

Polkadot’s revolutionary design offers a multi-chain network that solves the high fees and scalability issues that have hindered other blockchain networks in the past. Polkadot achieves this without compromising on decentralization or security. After our successful Amplitude auction on Kusama, Pendulum seeks to become a Polkadot parachain before 2023. Polkadot’s scalability was a key reason why we chose to build Pendulum’s blockchain infrastructure for traditional finance here.

About Amplitude

Pioneering the internet of fiat. Amplitude is the sister network of Pendulum on Kusama. It will act as a testing ground for Pendulum applications and network parameters and be powered by the AMPE token. Developed by Satoshipay.

About Pendulum

Building the missing link between fiat and DeFi through a fiat-optimized smart contract blockchain based on Polkadot’s Substrate. Allowing traditional finance fiat services to integrate with DeFi applications such as specialized forex AMMs, lending protocols, or yield farming opportunities. Developed by SatoshiPay.

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Pendulum

Pendulum

Traditional finance infrastructure blockchain. The missing link between fiat and DeFi. Limitless fiat. Decentralized future.