Polkadot (blockchain platform)

Polkadot Network

Denominations
Code	DOT
Development
Original author(s)	Gavin Wood
White paper	Polkadot White Paper
Implementation(s)	polkadot , gossamer
Initial release	May 26, 2020
Code repository	github.com/paritytech/polkadot-sdk
Development status	Active
Written in	Rust
Operating system	Cross-platform
Source model	Open source
License	GPL-3.0
Ledger
Timestamping scheme	Proof of stake
Website
Website	polkadot.network

Polkadot is a decentralized, nominated proof-of-stake blockchain with smart contract functionality. The cryptocurrency native to the blockchain is the DOT.

It is designed to allow blockchains to exchange messages and perform transactions with each other without a trusted third-party. This allows for cross-chain transfers of data or assets, between different blockchains, and for decentralized applications (DApps) to be built using the Polkadot Network.

History

Gavin Wood, founder of Polkadot.

Founding and ICO (2016–2019)

Polkadot was created by the Ethereum co-founder Gavin Wood, ^[1] Robert Habermeier and Peter Czaban. ^[2] The white paper for Polkadot was published by Wood in 2016. ^[2] The Polkadot SDK and other core technology components are being developed by Parity Technologies. The project raised over $144.3 million in its Initial coin offering in October 2017. ^[3]

In 2017, Gavin Wood, Aeron Buchanan, Peter Czaban, Reto Trinkler, and Mathias Bucher, established the Web3 Foundation, a non-profit organization based in Zug, Switzerland, ^[4] to promote and provide funding for blockchain-based decentralized web technologies. ^[5] The Polkadot SDK and other core technology components are being developed by Parity Technologies, a blockchain infrastructure company founded in 2015 by Gavin Wood and Jutta Steiner. ^[6]

In October 2017, Polkadot raised over $144.3 million in its initial coin offering (ICO). ^[7] Shortly after the ICO, a vulnerability in the multi-signature wallets developed by Parity Technologies led to the freezing of approximately $150 million worth of Ethereum, including a significant portion of the funds raised. ^[8] Over 500 wallets were impacted, including Polkadot’s wallet, which held a significant portion of the $144.3 million raised during its ICO. ^[9] In 2019, Polkadot raised an additional $43 million through a private token sale. ^[10]

Network Launch and Parachains (2020-2021)

In May 2020, Polkadot launched its mainnet under a proof-of-authority consensus model, managed by the Web3 Foundation during its early phase. ^[11] By June 2020, the network transitioned to a Nominated Proof-of-Stake (NPoS) consensus mechanism, allowing token holders to nominate validators to secure the network and process transactions. ^[12]

In December 2021, Polkadot introduced parachain functionality, allowing multiple blockchains to run simultaneously and connect to the network's Relay Chain. ^[13]

Concepts

Polkadot relays.

Multi-chain ecosystem

Polkadot is founded on the premise that there will be a multitude of blockchains in the future. It provides an open-source software development kit called Polkadot SDK that can be used by development teams to build their own blockchains. These blockchains can function independently, known as "solochains," or integrate into the Polkadot network as "parachains," thereby benefiting from shared security and cross-chain communication capabilities. ^[14]

Sovereignty, shared security and interoperability

Polkadot offers three properties to parachains: sovereignty, shared security and interoperability.

• Sovereignty refers to the idea that individual blockchains are sovereign in the way they conduct themselves. Blockchains define their own rules for how users can interact on them. Each parachain maintains autonomy over its governance and transaction processing, allowing it to define its own rules and optimize for specific functionalities without being constrained by the decisions or limitations of other chains. ^[15]

• Shared security means that one chain provides cryptoeconomic security to other chains. The Polkadot network has a primary blockchain named the relay chain, which provides security for parachains. This way, parachains enjoy high cryptoeconomic security, relieving them from the burden to source their own security through means that compromise their sovereignty. This pooled security model ensures that parachains inherit robust cryptoeconomic security without the necessity of establishing their own validator networks, thereby reducing resource expenditure and enhancing overall network integrity. ^[15]

• Interoperability is created through a common standard of data exchange, called XCM. ^[16] Since parachains have shared security, bridging times between parachains are typically under a minute. ^[17]

Cross-Consensus Message Passing (XCMP)

XCMP is Polkadot's protocol for facilitating communication between parachains. It enables the transfer of arbitrary data across chains, supporting a wide range of applications, including token transfers, smart contract interactions, and more complex cross-chain operations. XCMP operates by allowing parachains to send messages to each other through the Relay Chain. ^[17]

Governance

Polkadot implements an on-chain governance system, allowing stakeholders to influence the network's development and decision-making processes. Over time, its governance model has transitioned from Governance V1 to OpenGov, to address concerns of decentralization and community involvement. ^[18] Polkadot Council members and Relay Chain Validators are selected via Phragmen election method. ^[19]

Technical details

Proof of stake

Main articles: Proof of stake and Ouroboros (protocol)

The network uses a nominated proof-of-stake consensus algorithm. ^[20] The protocol used, Blind Assignment for Blockchain Extension (BABE), is derived from Ouroboros. ^[21] Validators are responsible for block production and validation, while nominators support validators by staking DOT tokens on their behalf. ^[22]

See also

• Sybil attack
• Proof of stake
• List of cryptocurrencies
• List of blockchains

References

1. Vigna, Paul (March 3, 2022). "How Bitcoin and a Crypto Exchange Became Part of Ukraine's War Effort". Wall Street Journal.
2. "About Polkadot, a platform for Web3". PolkadotAbout. October 17, 2017.
3. Butcher, Mike (October 17, 2017). "Polkadot passes the $140M mark for its fund-raise to link private and public blockchains". Techcrunch.
4. "Web3 Foundation Entity Details". Zefix. Retrieved January 8, 2025.
5. Butcher, Mike (October 17, 2017). "Polkadot passes the $140M mark for its fund-raise to link private and public blockchains". TechCrunch. Retrieved January 8, 2025.
6. "The future of Blockchain infrastructure, with Gavin Wood and Jutta Steiner at Disrupt Berlin". TechCrunch. July 21, 2015. Retrieved January 8, 2025.
7. Butcher, Mike (October 17, 2017). "Polkadot passes the $140M mark for its fund-raise to link private and public blockchains". TechCrunch. Retrieved January 8, 2025.
8. "Code bug freezes $150m of Ethereum crypto-cash". BBC News. November 8, 2017. Retrieved January 8, 2025.
9. "Code bug freezes $150m of Ethereum crypto-cash". BBC News. November 8, 2017. Retrieved January 8, 2025.
10. Butcher, Mike (October 17, 2017). "Polkadot passes the $140M mark for its fund-raise to link private and public blockchains". TechCrunch. Retrieved January 8, 2025.
11. "Ethereum Blockchain Killer Goes By Unassuming Name of Polkadot". Bloomberg. October 17, 2020. Retrieved January 8, 2025.
12. "After Musk Bitcoin U-turn, which coins are more climate friendly?". Al Jazeera. May 13, 2021. Retrieved January 8, 2025.
13. "Polkadot's Parachain Slot Auctions Raise Over $200 Million via Crowdloans". Nasdaq. June 27, 2021. Retrieved January 8, 2025.
14. Ezzat, Shahinaz Kamal; Saleh, Yasmine N. M.; Abdel-Hamid, Ayman A. (2022). "Blockchain Oracles: State-of-the-Art and Research Directions". IEEE Access. 10: 67551–67572. Bibcode:2022IEEEA..1067551E. doi: 10.1109/ACCESS.2022.3184726 .
15. van Haaren-van Duijn, Birgitte; Bonnin Roca, Jaime; Romme, A. Georges L.; Weggeman, Mathieu (September 2023). "The Seven Capital Sins in the Governance of Blockchain Ecosystems" (PDF). IEEE Engineering Management Review. 51 (3): 13–17. doi:10.1109/EMR.2023.3280130.
16. "Understanding XCM on Polkadot and How It Enables Cross-Chain Use Cases". Moonbeam. Retrieved 2024-09-11.
17. Morháč, Dušan; Valaštín, Viktor; Košťál, Kristián; Kotuliak, Ivan (2023). "ParaSpell XCM SDK: A New Protocol for Interoperability in Polkadot Paraverse". 2023 Fifth International Conference on Blockchain Computing and Applications (BCCA). pp. 569–576. doi:10.1109/BCCA58897.2023.10338906. ISBN   979-8-3503-3923-9.
18. Kiayias, Aggelos; Lazos, Philip (2022). "SoK: Blockchain Governance". Proceedings of the 4th ACM Conference on Advances in Financial Technologies. pp. 61–73. doi:10.1145/3558535.3559794. ISBN   978-1-4503-9861-9.
19. Brill, Markus; Freeman, Rupert; Janson, Svante; Lackner, Martin (January 2024). "Phragmén's voting methods and justified representation". Mathematical Programming. 203 (1–2): 47–76. doi:10.1007/s10107-023-01926-8. PMC   10858002 . PMID   38344413.
20. Piven, Ben (13 May 2021). "After Musk Bitcoin U-turn, which coins are more climate friendly?". www.aljazeera.com. Retrieved 5 July 2021.
21. "BABE | Research at Web3 Foundation". research.web3.foundation. Retrieved 2024-09-10.
22. Cevallos, Alfonso; Stewart, Alistair (2021). "A verifiably secure and proportional committee election rule". Proceedings of the 3rd ACM Conference on Advances in Financial Technologies. pp. 29–42. arXiv: 2004.12990 . doi:10.1145/3479722.3480988. ISBN   978-1-4503-9082-8.

External links

• Official website