Polkadot, one of the most decentralized networks in the world, sparked a spark that sparked the blockchain revolution and the move to more community-centric protocols. We examine what is behind the network that calls itself the “chain of chains” and seeks to disrupt the way people innovate with blockchain technology.
Polkadot is an exercise in blockchain abstraction
Polkadot was first launched in 2016 and is one of the most influential blockchain platforms on the market’s journey towards decentralization. Developed by Gavin Wood, one of the founders of Ethereum, it was designed as a solution that allows companies and developers to have easier access to blockchain technology.
In an interview with Sebastian Moonjava of Real Vision, Wood said his main goal at Polkadot is to solve the problem of rapid innovation. Building new, disruptive products takes a lot of hard work and a relatively small reward. Developers have to build everything from the foundation of their blockchain platforms to their business logic from scratch. This can be a mammoth task that slows innovation down.
“What Polkadot does is you can shorten a lot of this work,” he explained in the interview. “You can also decisively avoid having to build your own security base.”
Given the enormous PoW blockchains (PoW) for power consumption like Bitcoin, it made sense to make Polkadot a PoS (Proof-of-Stake) algorithm. However, this does not mean that PoS systems can do without their own disadvantages. According to Wood, the surge in PoS has created a huge liquidity problem – with dozens, possibly hundreds, of large PoS chains, the capital they acquire is fragmented and divided up. If all of the capital were pooled and used to secure all chains, their security would increase exponentially.
“This is really one of the main problems Polkadot solves – it allows the same capital base to secure many different domain-specific blockchains.”
The secret of polkadot, according to Wood, is its aggressive abstraction.
Given the problems Ethereum faced with high gas fees, Polkadot has been considered the most abstract protocol in the world. The blockchain has no concept of gas, accounts, or account balances.
“The way I designed Polkadot in the beginning was really trying to make it as general as possible.”
In contrast to creating applications on Ethereum, where each protocol must be associated with an ETH account, when creating applications on Polkadot, protocols can essentially exist as independent units, separate from Polkadot itself and its home currency, DOT.
Parachutes: independent but still deeply intertwined
Polkadot mechanics have not sacrificed simplicity for innovation.
As Wood explained, Polkadot is essentially a “chain of chains,” a network of many block chains known as parachutes that are linked together in the main chain of Polkadot, the relay chain.
Any application that runs on Polkadot is actually a parachute. The network requires developers to sign a lease agreement to upload their log to one of the free parachutes. As soon as Polkadot has reached its full functionality, around 100 free spaces will be available for various parachutes.
Developers who want to occupy a slot must sign a lease in the form of DOT tokens. According to Wood, the lease is just one way of determining the value of one project over another. The leased DOT tokens do not have to be created by a single entity. Users who own DOT can choose to sponsor a project with a deposit of their tokens. This way, users don’t transfer their tokens to a project, just put them behind the chain to secure it.
These tokens, Wood explained, never leave the property of the crowd and are simply placed behind a designated parachute.
However, the real value of parachutes lies in their ability to communicate with one another.
While they are essentially independent blockchains, they have the ability to communicate with one another. This communication happens every six seconds as the parachutes catch up with each other and ensure that the entire parachute system is working smoothly.
One way to make sure everything is okay in Polkadot is to communicate with validators, which are independent units that act as controllers of the network. They ensure that the parachutes are working properly and that no malicious activity is taking place.
The magic of Polkadot’s safety is hidden in the random assignment of groups of these validators to parachutes. As soon as Polkadot has achieved full functionality, around 1000 auditors will control the network. You will be split into 100 subsets of 10 validators, each with a literal skin in the game by locking their money in Polkadot. Each subgroup is then randomly assigned to a parachute, ensuring that its integrity is maintained.
When asked what is preventing the examiner groups from playing and devastating a parachute, Wood had a simple answer.
“They are swapped every six seconds,” he explained. “Even if you compromise one of these groups, it’s very difficult to get a long run. It’s basically impossible to get a long run of six-second blocks to really make an attack possible.”
An attempt to create a fork-free blockchain
Aside from its robust governance system, one more thing that makes Polkadot a dangerous competitor to most PoS systems in the market is its ability to withstand forks.
While the network was not intended to be a focal point for businesses and governments that value security over innovation, its strong foundation will certainly make it attractive to applications that seek to attract a less crypto and risk conscious population.
In addition to its many definitions, Polkadot is also a blockchain metaprotocol.
This means that anything related to Polkadot – parachutes, governance, credits, DOT tokens, etc. – is not part of the underlying protocol. All of this, Wood explained, is just business logic above the log and completely programmatic.
“This means that it can be swapped out for a different business logic at any point in Polkadot’s future.”
The actual protocol, on the other hand, is very thin and very difficult to change. The underlying consensus is similar to the consensus behind Ethereum 2.0 and represents a pretty significant advance compared to any existing consensus mechanism.
What Parity, Wood’s blockchain company behind Polkadot, did was bring WebAssembly into the blockchain consensus alongside a database.
Such a simple and thin consensus algorithm provides excellent protection against forks.
Since everything Polkadot is done on the WebAssembly basis, there is no need, and more importantly, no way to change the underlying protocol. If a Polkadot mechanism needs to be changed, it can be done quickly, efficiently and inexpensively using Substrates, its basic protocol.
Another but equally important thing that protects Polkadot from forks is its parachutes.
“We can actually do the best things hard forks do, policy or protocol experiments, at the parachute level,” said Wood.
All of these experiments can be performed in parallel, one in each parachute. Those that work can then be added to the Polkadot relay chain, while those that don’t work can either be left on the parachute or dropped entirely due to their programmability.
This is diametrically opposed to how Ethereum works.
Ethereum’s strict definitions for every aspect of its protocol force all users to buy into its legal system. Anyone using the network, be it a single person or a huge DeFi project with billions in locked value, must be committed to the same underlying blockchain logic.
Polkadot allows users to define their own laws regardless of what Polkadot has to say about it.
“Polkadot exists deeper in the stack,” explained Wood. “Polkadot is a foundation that only serves to provide security and interoperability to the component chains. Doesn’t matter more than that. “
It’s a bet against maximalism, said Wood, adding another catchy definition to Polkadot.
“You can think of this as a layer-zero blockchain,” he concluded.
Please visit the Polkadot Ecosystem on CryptoSlate for more information.
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