Polkadot briefly explained

Chen YanLong

Published in

SWF Lab

4 min readJul 28, 2022

a brief explanation of Polkadot, published on July 28, 2022, by Chen YanLong.

table of contents.

Introduction
Architecture
Advantage
Consensus
Tokenomics

Introduction

Polkadot is a protocol which allows blockchains to connect to different blockchains, it allows any type of data, tokens to be sent between any type of blockchain. Polkadot is developed by Ethereum co creator Gavin Wood, and was launched on May 26, 2020.

Imagine you want to build a game chain, you need different functions, and you wouldn’t want to do it all by yourself. As an example, if your game need a recharge function, you might need some DeFi functions, or maybe you need NFTs to build the game. You’ll have to get all these functions, and these functions has already been set on other blockchains, you can get them from those blockchains.

So this is what Polkadot does, it combines different blockchains, they can cooperate, focus on whatever they are good at, and increase their performance. They can let the others do what they are good at. In brief, Polkadot is a crosschain protocol

So how exactly does it works, we’re gonna see it architecture first.

Architecture

The structure of Polkadot is different from the other public blockchains.

Polkadot is radial, it consists of a relay chain in the middle, and the surrounding parachains and bridges.

Four different chains on Polkadot:

Relay chains

The heart of Polkadot, responsible for the network’s security, consensus and cross-chain interoperability.

Parachains

Sovereign blockchains that can have their own tokens and optimize their functionality for specific use cases. Parachains is connected to Relay chains by leasing a slot on it.

Parathreads

Parathreads are parachains that are temporarily participate in Polkadot security without needing to lease a dedicated parachain slot.

Bridges

Special blockchains that allow Polkadot shards to connect to and communicate with external networks like Ethereum and Bitcoin.

Consensus

Polkadot uses “Nominated POS”, this allow token holders to vote for validators to represent them. On the other hand, Polkadot uses hybrid consensus which consist of BABE and GRANDPA to take benefit on both probabilistic ( continuously producing new blocks ) and provable ( deterministic ) finality.

1. BABE

Blind Assignment for Blockchain Extension. It is for block generation.

Validators in Polkadot will participate in a lottery in every slot that will tell them whether or not they are the block producer candidate for that slot. There may be two or more validators for the same slot, all will start producing new block, and the one who first reaches most of the networks wins.

2. GRANDPA

GHOST-based Recursive ANcestor Deriving Prefix Agreement. It is for proving finality.

GRANDPA is a finality gadget which can speed up the finalization process, and it works as long as 2/3 of nodes are honest.

Consensus Roles

there are three roles that maintains Polkadot

Nominators: nominators stake their DOTs and select the validators of relay chain.
Collators: Collators maintain parachains by collecting parachain transactions from users and producing state transition proofs for validators.
Validators: validate proofs from collators and it changes every epoch(day)

interaction between collators and validators

Advantages

here are the four advantages of Polkadot:

heterogeneous sharding
scalability, upgradeability
transparent governance
cross-chain composability

Tokenomics

DOT is the native token of Polkadot, we’re going to discuss the inflation of DOT, its economic part.

Inflation :

aims to have 50% staked in NPoS, 30% in parachains deposits (who gets a parachain slot)
inflationary, approximately 10% annually
no maximum number

inflation (“+” means cause to inflation, “–” means deflation)

+ NPoS rewards

+ treasury (explained later)

– slashing ( punishment for bad validates )

– fees

the amount staked influence the inflation rate(explanation of the graph above)

x-axis : Proportion of DOT staked

y-axis : Inflation, annualized percentage

Blue line : Inflation rewards to stakers

Green line : Staker rate of return

Inflation should reach the maximal when staking rate reaches 0.5 ( the ideal staking rate) to control staking rate.

functions of DOT:

governance
stake for the operation of the network( nominators, validators, etc.)
parachain slot acquisition

Thanks for reading, a more comprehensive explanation to Polkadot is being worked, welcome to take a look at my other publications !