Polkadot is a blockchain platform that was designed to address some of the limitations of existing blockchain networks, such as low scalability and the inability to connect and interoperate with other blockchains easily.
Polkadot boasts high scalability and adaptability, enabling the development and deployment of decentralized applications. The platform endeavors to construct the “Internet of Blockchains,” facilitating seamless connectivity and interoperability among multiple blockchains.
Key Takeaways
- Polkadot is a highly scalable and flexible blockchain platform that allows for the creation and deployment of decentralized applications.
- Polkadot aims to create the “Internet of Blockchains,” – allowing blockchains to connect and interoperate easily.
- The network enables the creation of decentralized applications that can span multiple blockchains and take advantage of the unique features and capabilities of each.
Polkadot was created by a team of blockchain developers and researchers led by Gavin Wood, who also happens to be one of the co-founders of the Ethereum network. Apart from Wood, the team includes several other members that were crucial to its development, such as Peter Czaban, Robert Habermeier, and Janiko Chan.
The network supports the creation of dApps that can traverse various blockchains and capitalize on the distinct capabilities of each. Furthermore, it utilizes advanced sharding and governance mechanisms to achieve optimal performance and decentralization. Additionally, it allows for creating custom blockchains and running smart contracts on them.
How does Polkadot Work?
The Polkadot protocol uses “proof of stake” (PoS) to secure its network and validate transactions. In proof of stake, block validation is determined by the number of tokens a node holds, rather than the amount of computing power it can provide, as is the case with proof of work (PoW) systems like Bitcoin. This makes the process of reaching consensus more efficient and less resource-intensive.
Unlike most blockchain networks that are built on a single blockchain, Polkadot is built on a network of multiple blockchains, known as “parachains.” This structuring allows for greater scalability and flexibility since each parachain can handle its own transactions independently. In addition, Polkadot has a central “relay chain” that connects all of the parachains and enables communication and interoperation between them.
Relay Chain
The Polkadot relay chain is the central component of the Polkadot blockchain platform. It is a blockchain that connects and coordinates all of the other “parachains” on the network.
The relay chain is responsible for several key functions in the Polkadot ecosystem, including:
Consensus and security
The relay chain uses a proof of stake (PoS) consensus mechanism to secure the network and validate transactions. This means that block validation is determined by the number of tokens a node holds, rather than the amount of computing power it can provide, as is the case with proof of work (PoW) systems like Bitcoin.
Interoperability
The relay chain enables the different parachains on the network to interoperate and communicate with each other. This allows for the creation of dApps that can span multiple parachains and take advantage of the unique features and capabilities of each.
Governance
The relay chain is also used for on-chain voting by token holders, which allows for decentralized governance of the Polkadot network. This means that the community can have a direct say in the decision-making process and the direction of the platform.
The DOT Token
DOT is the native token of Polkadot’s blockchain platform. The DOT token serves to secure the network and to participate in the proof of stake (PoS) consensus mechanism. This translates to DOT holders earning rewards for participating in the network to help maintain its security. In addition to that, DOT tokens are also used as a means of exchange on the network.
The DOT token plays an elemental role in the Polkadot ecosystem, providing the incentive for securing the network and enabling the creation and deployment of dApps.
Staking DOT
DOT holders can engage with the staking system in various ways, depending on their level of technical expertise, time commitment, and financial resources. Validators are the backbone of the system, as they perform the majority of the work and require a significant investment of time, technical knowledge, and DOT.
To become a validator, one must operate a node, which is one of the computers that make up the network, with minimal downtime and stake a substantial amount of DOT. In return, validators are granted the right to verify legitimate transactions, add new blocks of transactions to the relay chain, and potentially earn newly created DOT, a portion of transaction fees, and tips.
However, if a validator acts maliciously, makes a mistake or experiences technical difficulties, they may forfeit some or all of their staked DOT.
Nominators, on the other hand, provide regular investors with an indirect way to participate in staking. They can delegate some of their DOT to a validator they trust, who will act according to the rules. In exchange, nominators receive a portion of the DOT earned by their chosen validators.
However, it is important for nominators to exercise caution when choosing a validator, as they may also forfeit some of their stake if the validator breaches the rules.
Polkadot FAQ
– What Is Polkadot (DOT)?
Polkadot (DOT) is the native token of the Polkadot blockchain platform. It’s a cryptocurrency that is used to secure the network, having users participate in the PoS consensus. This means that token holders can earn rewards for participating to help maintain the network’s security and stability.
Apart from network consensus, DOT is also used as a means of exchange. It pays for transactions and smart contract fees and can be traded on various crypto exchanges. At the time of writing, DOT’s circulating supply sits at around 1.14 Billion. DOT price reached an all-time high of $55.00 on Nov 04, 2021.
– What Is Polkadot Used for?
Polkadot is a blockchain platform that is used for creating and deploying dApps. These are applications that run on a decentralized network rather than a single, centralized one. This means they are superior in terms of security, transparency, and resistance to censorship, downtime, or any form of third-party interference.
DApps can be implemented for wide-ranging purposes, such as creating DeFi platforms, building supply chains, creating digital ID systems, and much more, you name it. Their potential reach is dependent on their developers. Given its flexible architecture and interoperability, Polkadot is ideally suited for hosting dApps.
Final Thoughts
Polkadot interconnects blockchains, and the dua matchmaking ecosystem interconnects communities. The only thing missing is a native token within our ecosystem, and that is soon to change with DUA token, integrating DeFi into the dua +5M user base. Learn about it here and follow our Twitter for updates!