Analogy

In the world of crypto, We usually see an emphasis given to names. Sometimes, they can seem a little odd. The Polkadot blockchain name actually refers to the Polka dot fabric pattern, with multiple disperse dots as the images above describe.

Similar to the computers where they were unuseful and isolated without internet, like those disperse dots. In web3, Blockchain projects work in isolation too, and seek a mean to talk to each other, as the internet did for computers. Well, this mean

Definition

Polkadot is a platform for web3 that offers itself as the internet for all types of blockchains. It solves the problem of the lack of interoperability. Think about it like a neighborhood, where roads and fundamental infrastructures connect blockchains houses. In other words, Polkadot is basically a way to make it easy to create and connect blockchains with each other.

Brief history

If you are unfamiliar with Polkadot, here is what you need to know. Gavin Wood created Polkadot in 2016. Gavin is a co-founder of Ethereum and coded the first version of it. Parity Technologies, is a UK software company that built Polkadot in coordination with Web3 Foundation. A Swiss nonprofit that issues grants for upcoming Polkadot projects.

Polkadot

Polkadot is a smart contract cryptocurrency. That uses a proof of stake consensus mechanism, called nominators proof of stake similar to delegators POS but better.

This consensus allows Polkadot blockchainto handle 1k transactions per second, and Polkadot staking needs DOT. The Polkadot native coin. DOT as a coin, is used to pay for transactions fees across the network, as well as to participate in Polkadot’s governance process.

How do blockchains become connected?

Relay chain | Parachains

To answer this question, we need actually to take a close look over the two main components of Polkadot. The Relay chain and the different Parachains that exist on the network.

Polkadot architecture has a model of a Hub which is the center surrounded by so many branches. We call the hub the Relay chain and the branches the Parachains.

Relay chain & Parachains

Precisely, the Relay chain is the basis of the Polkadot network where all Parachains come to achieve consensus, Although, Polkadot is a smart contract cryptocurrency. Its base blockchain, the relay chain is not smart contract compatible and only handles dot transactions related to staking and governance. Polkadot smart contract functionality comes from Parachains which are basically different types of blockchains that are plagued to the Relay chain to sync up. Gavin wood described this process as the employees at the office who have their own specific jobs and who come so often to sync up and coordinate their work with meet-ups.

Types of parachains

There are 3 types of parachains: Common Good Parachains | Parathreads | Standards Parachains.

Common Good Parachains

These are blockchains that provide a crucial function to the Polkadot ecosystem such as the cross-chain bridge to Ethereum.

Parathreads

This feature is the “pay-as-you-go” option for blockchains projects that pay to get a plague to the Relay chain, with no fixed duration or up-front costs.

Standard Parachains

These are blockchains that are leased for up 2 years at a time by a single crypto project.

Because there is a limit of 100 slots of Parachains on the Polkadot Relay chain, there is a vetting process for each crypto project looking to secure each of these Parachains types.

The crypto projects that receive Common Good Parachains slot are selected by community governance, While the crypto projects that received the Parathreads slot are those that pay the highest price. And the crypto projects that receive regular Parachains slots are selected via what we call Parachain slot auctions.

The Parachain slot auctionis kind of similar to the regular auction, the only difference is that the crypto projects willing to secure a slot need to bid in DOT instead of dollars, and the winner of the auction is selected at a random time near the end of the auction to prevent last minutes bidding.

PLOs | Parachains loan offering.

Like ICOs or the initial coin offering, some crypto projects are willing to give their tokens in exchange for DOTs to use in their Parachain slot auction. The difference between ICO and PLO is that when you participate in a PLO, the DOT you give to the crypto project, is never sold and the crypto project never gets the DOTs you gave them because these DOTs are just locked during the period of Parachains slot auction which is often a maximum of 2 years period. At the end of the lease period, Your DOTs are returned meaning that you have never paid anything except your time.

Parachains slot early winners

Acala was the first crypto project that won the first Parachain slot auction with $1.3 Billion worth of DOTs. Shortly afterward, a project called MoonBeam won the second slot auction with $1.4 Billion of DOTs.

The last auction on the 2nd batch of auctions was programmed on the 3rd of March this year, The crypto projects that won the second batch of auctions will be plagued in on March the 11th.

Treasury | Kusama

Polkadot is an attractive platform due to its Treasury and its Kusama test network. Instead of having to secure some blockchain project's own network, secure funding, and million other details, Polkadot makes it easy to set up a plug and play Parachain easily and quickly. According to Gavin wood, Kusama is a practice network that embraces chaos, This network gives blockchain project holders the option to test their blockchain before getting launched on the real network. Although it is a test network, be aware that it has real stakes, that give enough incentives to people not to play too much. But actually try things that are ready for real-world and maybe a little risky.

Kusama ends up having a real influence on the development of the real Polkadot network.

In regards to the treasury, Polkadot allows anyone who wants to bring some changes to their platform, to stake some funds in the treasury, And when those changes are accepted, these funds are refunded.

Law

Gavin wood emphasizes his attention on regulation and decentralization since he believes that only a matter of time till regulators would crack down on the crypto centralized projects. To make sure Polkadot doesn't become a target, Gavin has been reading regulator's documentation from around the world to identify the crypto components that regulators are most likely to target.

Software development || Generic || Service provision (RPCs, wallets, app-sites) || Multisigs (Multisigs DAOs, council/treasury) || Custodians (hosted wallets, non-p2p) || Easifiers (wallets/ apps with centralized features)

Willing to p2p-ifying everything

Gavin has identified 4 adjustments that developers need to decentralize the most.

The first is governance specifically introducing an alternative to the Polkadot council committee who currently has a significant amount of power in the governance process. The second is light-clients which are an alternative to RPC nodes, which will permit the interaction with Polkadot blockchain in a decentralized manner. The third is to use bootstrapping instead of using boots-node which is another technical term for decentralizing validator's node infrastructure. The fourth is the most interesting which mixNet, a protocol that prevents transaction audits on public cryptocurrency blockchain, based on breaking the link between the sender and the recipient.

Polkadot 2.0

According to Gavin, the focus of Polkadot 2.0 is to increase scalability, interoperability, treasury management, and Parachain onboarding.

The limited public documentation of the Polkadot 2.0 stated that Polkadot will leverage the zero-knowledge proof, test the limit of how many Parachains a relay chain can support, and see whether it is possible to link multiple relay chains together.

Outro

Polkadot upgrades are ultimately decided only by DOT holders by community vote, If no one votes, it is very difficult or impossible for Polkadot to make progress.