Polkadot is a global network of interoperable chains, a networking solution for blockchains to operate with each other in a safe and reliable way. With Polkadot, you will be able to communicate with other existing chains that have been ported on the Polkadot layer but also create new chains that will be able to send transactions and messages with each other. Compared to other networking protocols, Polkadot not only allows the transfer of value across chains but also transfers of any kind of data, such as messages.
Ultimately, Polkadot enables the creation of networks of blockchains. Because one chain does not fit all applications, in network of blockchains, you can have various chains with their own characteristics and parameters adapted to the problem these are solving — e.g. permission-based, public, private, different number of validators, inflation, governance system, their own token or not, oracle chain, and any kind of application-specific blockchain.
The Story behind Polkadot
An internet where users are in control of their own data, identity and destiny.
Polkadot was conceived about 4 years ago by Gavin Wood. Co-founder and initial CTO of Ethereum, Gavin had finished building and writing the code for the first implementation of Ethereum and was looking for ways to take this to the next level and make it scalable. In January 2016, Gavin announced its intention to leave Ethereum and decided to focus on a new venture that would achieve its vision of a truly decentralized internet: the Web 3.0.
In the summer of 2016, while waiting for a new Ethereum specification that would include sharding, the idea of Polkadot came to Gavin. Taking the thinking process further, Gavin originated an idea where the shards connected to the relay chain would have their own business logic and specificities: a heterogeneous multichain protocol. On November 2016, following these reflexions, the first whitepaper of Polkadot was published.
Following that, in June 2017, the Web3 Foundation was created, with the role to develop technologies and applications in the fields of decentralized web software protocols. Since then, Polkadot raised various rounds of fundings (including one affected by the Parity wallet hack) for more than $140m. The project contracted with multiple development agencies and is now approaching Mainnet launch scheduled for Q4–19.
Where are we now?
In October 2017, the Polkadot pre-sale started and raised 485,331 ETH raised (at 1 dot = 0.109 ETH), amounting to around $140m based on ETH prices at that time. Some of these funds were lost to the Parity multi-sig wallet hack, however, it appears that Edgeware’s lockdrop token distribution mechanism may provide some relief for Polkadot (which owns 60% of the ETH frozen following the hack).
A few weeks later, the first codes were published on Github. After several months of coding 🤓, Proof-of-Concept 1 was here in May 2018 and Gavin showed a test of a governance-based dynamic runtime-upgrade for Polkadot.
In July 2018, Proof-of-Concept 2 was launched through an on-chain governance-based upgrade, and the first parachain was deployed. This upgrade also introduced staking rewards and slashing for validators, and was the first real-world use of Rust Libp2p.
In January 2019, Proof-of-Concept 3 was launched, which includes the GRANDPA algorithm, enabling near-instant finality for blocks.
In April 2019, Proof-of-Concept 4 started with some new staking features to make running a validator safer and more secure.
In August 2019, Kusama, an experimental network within the Polkadot’s ecosystem, was launched. It is based on the unaudited version of Polkadot and it is a highly experimental network.
In the last quarter of 2019, Proof-of-Concept 5 should launch with specs including interchain message passing, BABE block production and parachain auction module. 1.0 release candidate and genesis should follow soon after PoC 5 has been tested. At the time of this article, these are expected to launch by the end of 2019 as well.
- Interoperability: Polkadot allows blockchains to interact in a trust-free fashion. Through Polkadot, all connected blockchains will be able to transmit value including messages or any kind of data in a way that they can trust one another.
- Scalability: There are two ways to enhance blockchain scalability: vertical and horizontal stability. Vertical scalability consists of increasing transaction throughput (TPS). However, TPS can’t be infinite and even a network with high TPS might reach its limits if it is successful. Thus, Polkadot, like other networking protocols, focuses on horizontal scalability: an architecture with multiple interoperable chains running in parallel, making the network theoretically infinitely scalable. The idea is that by making blockchains interoperable and having the ability to communicate with each other, you create a scalable network of application-specific blockchains that can each have their own business logic. Within the Polkadot networking platform, you can imagine that there will be smart contract platforms (like Ethereum), oracle chains and privacy protocols, all connected and interacting with each other.
- Shared security: This model, where the system shares the same pool of validators, allows the whole system to move together in one step if there is one transaction on a parachain, and improves trust within the ecosystem. With shared security, all blockchains have the same security guarantees and you can immediately trust the validity of a parachain and of the whole network, which is secured by the same tokens, the DOT tokens. You can trust that everything has been recorded correctly on the parachains and that there is no double spend in any of the chains of the network.
- Governance: The idea is that Polkadot is a self-amending chain that can evolve without forks over time through new features and bug fixes. Initially, DOT holders will have complete control of the network, and stakeholders can modify the network through governance, and how governance is defined can also change (stake-weighted referendum with staked DOTs). This governance model, still under design, might evolve over time to include other stakeholders such as parachains. In addition to public referendum voting, additional measures will be set up such as a Council and other voting schemes.
- Making blockchain development easy with Substrate: Polkadot is a developer-oriented protocol with a focus on making its ecosystem thrive with other blockchains and applications connected to the network. With Substrate, an optional modular framework and development kit for building applications on the blockchain, developers can save a crucial amount of time when building their own chain or app, and focus on their own business logic (consensus mechanism, token or not, governance mechanism, etc.). Thanks to Polkadot’s shared security model and Substrate, developers can focus on what makes their chain or app unique and benefit from built-in security and connectivity, and do not have to even bootstrap a validator community around the project. Nonetheless, Substrate, the built-in shared security or even connectivity to Polkadot are optional: one can create a solo-chain and later on plug-in into Polkadot and transform it into a parachain, one can use Substrate for whatever blockchain-oriented developments, and one can build a parachain without using Substrate.
Components of the ecosystem
Polkadot is a global network of blockchain designed around key components:
- Relay chain: in charge of checking the validity of all the parachains and making sure they operate correctly and securing them. Anyone can connect their chain to the Polkadot network and benefit from this shared security and interact with the other chains.
- Validators: Staked full nodes that are responsible for verifying and adding blocks to the relay chain. They can also be fishermen.
- Parachains: Parachains are application-specific blockchains built to interact with Polkadot. A parachain could be for example a privacy coin connecting to the network, a Dapp with its specific chain, an oracle chain, or a smart contract focused chain. It attaches to the security provided by a relay chain and its validator pool rather than providing its own.
- Collators: Bundle (collate) transactions on the parachain they monitor into blocks, and send a proof of this block to validators. They can also be fishermen.
- Nominators: In Polkadot’s NPoS (Nominated Proof-of-Stake) consensus algorithm, nominators elect validators by delegating their voting power to them, and share the risks and rewards of maintaining the network decentralized and secure.
- Fishermen: Fishermen monitor bad behaviours, if able to prove invalid block, whoever submitted that block will have their DOTs slashed and given to the Fishermen who will receive part of the staked DOTs from the malicious actor. This role may be filled by validators and collators, which are expected to police themselves for a share of the slashing rewards in case of misbehaviours.
- Solo-chains with Bridge: Solo-chains are completely sovereign chain such as Ethereum and can be bridged into Polkadot’s network to communicate with its various blockchains, a bit like sidechains.
What can you build on Polkadot?
Polkadot is a networking multi-chain protocol and as such developers and companies can build both blockchains connected to the ecosystem but also various kind of DApps. The optional Substrate SDK can it very easy for any builder to kickstart their development process, would it be a parachain or a specific app.
As of January 2019, at least 27 projects including oracle ChainLink, governance protocol Aragon and p2p asset exchange protocol 0x had announced their intent to build on Polkadot. Another interesting project being built is Edgeware, a self-improving smart contract blockchain with PoS consensus and built-in governance.
The Kusama initiative: Expect Chaos
Kusama is an experimental network within the Polkadot’s ecosystem. It is not a testnet, but an unaudited network built on Polkadot v0.5.0, whose goal is to understand and test the technology under “real” economic conditions.
Kusama was launched in August 2019 and began as a Proof-of-Authority network, but validators can already issue their intention to operate on the network.
For more details on Kusama, you can check this article.
Who’s behind Polkadot?
Web3 Foundation is the primary entity behind the Polkadot project, it acts as treasurer and council for Polkadot, and ensures the development of the project and of its ecosystem. Web3 does not only back Polkadot, but also other protocols such as Kusama (Polkadot’s experimental network), a decentralized messaging protocol, community events (Web3 summit), and funds other protocols as well such as Ethereum, where a lot of team members are from.
Web3 contracted about 5 development teams to help build the protocol: Parity Technologies, Chainsafe Systems, Soramitsu, OpenNetSys and Polkadot JS.
Want to discover more about Polkadot?
- Parity: a brief summary of everything Substrate Polkadot
- Polkadot’s official website
- Substrate’s official website
- Polkadot’s Github
There’s so much to tell about Polkadot and the great tools and frameworks that have been and are being built that we have taken some shortcuts in this article. Please feel free to browse through their documentation and have a look at their blog or our links above. Additionally, your comments are welcomed.