Sponsored Links
Polkadot

Polkadot! the mean for blockchains to talk to each other.

Views: 913
9 0
Sponsored Links
Read Time:6 Minute, 54 Second

Terminology

According to wikipedia.

Polka dot is a pattern consisting of an array of large filled circles of the same size.

Polka dots are commonly seen on children's clothing, toys, furniture, ceramics, and Central European folk art but they appear in a wide array of contexts.
Polka dot pattern
Sponsored Links

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.

Sponsored Links

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 would be the Polkadot.

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.

Sponsored Links
Layer 0 blockchain

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 blockchain to 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.

Sponsored Links

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 auction is 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.

Winners of the parachain slot auctions

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.

Leave a Comment

Your email address will not be published.

Sponsored Links