By
Dimitar Bogdanov
July 21, 2021
4 Min Read
Polkadot is a shard network designed to connect specialized chains and bring greater interoperability to the blockchain world. The protocol aims to provide the necessary infrastructure to help teams build innovative projects without having to build everything from scratch, while also integrating various development pathways within the broader network. By utilizing sharding and parallel processing, Polkadot can support high transaction throughput, enabling blockchain projects on the network to operate at scale. These different development pathways cater to diverse project needs and skill levels, enhancing collaboration and functionality throughout the expansive network. It’s a highly ambitious project that’s already making waves in the blockchain and DLT space. So let’s dive in to see what makes Polkadot so interesting.
Polkadot is a decentralized platform that enables interoperability between different blockchain networks, allowing for the exchange of data and assets between previously incompatible systems. The Polkadot network is designed to be fast, scalable, and secure, making it an attractive solution for developers looking to build blockchain-based applications. With its unique architecture, Polkadot introduces key concepts such as the relay chain, parachains, and cross-chain messaging, which enable seamless communication between different blockchain networks.
At this point the benefits of the current generation of blockchain technology are well understood, but so are the drawbacks. For starters, legacy blockchains such as Bitcoin and Ethereum typically struggle when they have to process large transaction volumes, which leads to network congestions and transaction fee hikes. This limited ability to scale is one of the biggest challenges the blockchain community is working to solve today.
Then there is the fact that currently, blockchain networks are not very good at interacting with one another. For example, sending a message from Bitcoin to Ethereum is not as straightforward a task as it needs to be for blockchain to have any hope of reaching ubiquity.
Other issues include security challenges with new blockchains and the fact that building a blockchain from scratch is genuinely difficult.
Launched last year, Polkadot is a proof-of-stake network that aims to solve these security and interaction challenges and build the necessary infrastructure to support a decentralized web of the future. It is often referred to as a multi-chain network or a ‘blockchain for blockchains’, which hints at its lofty ambitions. The project is driven by the Web3 Foundation and Parity Technologies, led by Jutta Steiner and Ethereum co-founder Gavin Wood. Polkadot enables application developers to integrate with its blockchain to create solutions that enhance user interaction with the ecosystem.
Polkadot has its own token, DOT, which powers the network’s ecosystem, including its robust consensus mechanism and governance. The Web3 Foundation raised substantial capital through DOT token sales to develop the blockchain infrastructure.
Polkadot is designed to support transfer of any data, not just tokens between chains on its network and even to and from external networks like Bitcoin. Staying updated on the development process of the Polkadot smart contract ecosystem is crucial for stakeholders. This is possible thanks to Polkadot’s unique infrastructure, which takes sharding to a whole new level. So let’s examine what makes Polkadot tick, including its core blockchain functionality in the context of various development pathways for building applications.
The beating heart of Polkadot, the Relay chain is the source of the network’s shared security and consensus and facilitates cross-chain interoperability. Shard chains, referred to as ‘parachains’ in Polkadot, are able to connect to the Relay chain and use it for transaction validation and security. Relay chain validators play a crucial role in block production and transaction validation, ensuring the network's efficiency and security.
Polkadot’s consensus is maintained by four types of network participants:
Using Polkadot’s technology and tooling, such as the modular development framework Substrate, parachain developers can build, deploy, and maintain custom parachains using the Polkadot SDK. These developers can build sovereign shard chains that can have their own tokens and specialized functionalities. The tools and resources available for developers to maintain custom parachains in the parachain ecosystem are extensive. These chains can connect with the Relay chain via dedicated slots. Because they work in parallel, shard chains are called parachains.
Parachains that cannot afford or simply don’t need to lease a full parachain slot can still have access, albeit a temporary one, to the Relay chain, thanks to parathreads. This flexible approach highlights the different types of development pathways available for developers, emphasizing how each pathway is tailored to accommodate diverse projects and skill levels. The idea here is that instead of hosting parachains, some slots are set aside to form a parathread pool that stores the blocks of the winners of a block-by-block parathread fee auction. This is essentially a pay-as-you-go model that allows chains to pay for Relay Chain access on a block-by-block basis.
We already established that Polkadot is designed to facilitate transfer of data between chains in its ecosystem, allowing users to interact with the Polkadot blockchain ecosystem seamlessly. However, the project’s ultimate goal is to enable interoperability across the entire decentralized web, which necessitates a way for native Polkadot chains to communicate with external networks like Ethereum and Bitcoin. Polkadot achieves this through bridges.
The DOT token is the native cryptocurrency of the Polkadot network and plays a crucial role in the platform’s governance and staking mechanisms. DOT holders can participate in governance by voting on proposed software upgrades, and they can also stake their tokens to support the network’s security and validation process. The staking mechanism is based on a proof-of-stake consensus algorithm, which requires validators to hold a certain amount of DOT tokens to participate in the validation process. Validators are responsible for verifying transactions, adding new blocks to the relay chain, and potentially earning newly created DOT tokens and transaction fees.
Polkadot provides a robust framework for building blockchain-based applications, with multiple development pathways available to developers. The Polkadot SDK is a key tool for developers, offering a comprehensive set of tools and resources for building custom parachains and interacting with the relay chain. Developers can leverage cross-consensus messaging (XCM) to create innovative cross-chain workflows and applications, and they can also execute custom logic on existing chains using smart contracts.
The Polkadot smart contract ecosystem is in active development, with a focus on providing a flexible and adaptable platform for developers to build custom solutions. Developers can use popular tools such as ink! and EVM to build and deploy smart contracts on the Polkadot network, and they can also leverage the Polkadot network’s shared security and interoperability features to create seamless interactions between different blockchain networks. The Polkadot network forum provides a platform for developers to discuss and share knowledge, and the Contracts on AssetHub Roadmap offers a resource for developers to follow progress and stay up-to-date with the latest developments.
Even at this relatively early stage of Polkadot’s development, the protocol brings several distinct benefits for the blockchain space. Here are some of Polkadot’s main advantages:
As the Polkadot smart contract ecosystem is undergoing active development, users should expect frequent changes as part of this dynamic environment. This ongoing evolution encourages engagement through forums for updates and discussions about ongoing modifications.
Polkadot can leverage smart contracts to enhance efficiency within the development process, processing many transactions on multiple parachains in parallel. Various development pathways accommodate different developer skill sets while functioning cohesively within the overall ecosystem, making Polkadot much more scalable than legacy networks.
Polkadot enables developers to customize their chains by selecting from different development pathways tailored to various project requirements and skill levels. Each pathway caters to specific project types and developer skill sets, emphasizing the flexibility and compatibility within the broader ecosystem. Optimizing chains for specific use cases like finance or gaming improves their efficiency and security. And in Substrate, developers have a powerful and modular framework that allows them to easily add features and functionalities that fit the design and purpose of their chains.
One of the biggest bottlenecks when developing a blockchain from scratch is building a robust consensus mechanism and ensuring that the network is well secured. Understanding and leveraging core blockchain functionality is essential for successful application development within the broader ecosystem. Additionally, collators play a crucial role in managing valid parachain transactions and ensuring they are submitted correctly to relay chain validators. New blockchains often experience security issues, like struggling against 51% attacks, for example. But through the Relay chain, parachains can take advantage of Polkadot’s built-in consensus and security. This allows for developers to focus their efforts on building the core functionalities and features of their chains.
The fact that Polkadot enables easy communication between separate parachains, as well as interaction with external networks, can be really beneficial to dApp development. Users can interact with the Polkadot blockchain ecosystem, facilitating seamless transfer of tokens and information across various networks. Developers can create solutions that enhance user interaction with the ecosystem. The ability to pull relevant data from various specialized chains could fuel the creation of new types of decentralized applications. And with the help of blockchain bridges, innovative dApps built on Polkadot could have a far-reaching impact across the blockchain space.
Ultimately, this is the goal of the ambitious Polkadot project. To build an infrastructure capable of uniting the various blockchain networks dotting the DLT landscape. To be a ‘blockchain for blockchain’.
Peter Czaban, alongside co-founder Gavin Wood, played a pivotal role in the founding of Polkadot and has significantly contributed to the development of blockchain technologies.
So far, the signs have been more than encouraging. Just over a year after its official launch, Polkadot has already garnered a vibrant community of developers, launching innovative projects, building applications and creating tools. LimeChain is one of the major contributors to the project, as our team is building Subsembly, an Assembly Script runtime framework for the Polkadot and Substrate communities.
In addition, the DOT token has become a top 10 cryptocurrency by market capitalization, which indicates that its utility and that of the Polkadot network has been recognized. And as the platform continues to attract interest from both developers and investors, it seems to be well-positioned for the future.
About LimeChain
Founded in 2017, LimeChain is a blockchain development company dedicated to building, exploring, and expanding blockchain solutions that deliver value for leaders and organizations. With 250+ projects delivered worldwide, our team of 170+ experts provides blockchain-agnostic solutions that drive innovation and growth for dApps, enterprises, and protocols.
