Any type of data across any type of blockchain
Polkadot is a network protocol that allows arbitrary data—not just tokens—to be transferred across blockchains.
This means Polkadot is a true multi-chain application environment where things like cross-chain registries and cross-chain computation are possible.
Polkadot can transfer this data across public, open, permissionless blockchains as well as private, permissioned blockchains.
This makes it possible to build applications that get permissioned data from a private blockchain and use it on a public blockchain. For instance, a school’s private, permissioned academic records chain could send a proof to a degree-verification smart contract on a public chain.
Polkadot unites a network of heterogeneous blockchains called parachains and parathreads. These chains connect to and are secured by the Polkadot Relay Chain. They can also connect with external networks via bridges.
DOT are the token native to the Polkadot network for the purpose of carrying out the key functions of the platform, it is not an ERC20 token being native to Polkadot platform.
The DOT token serves three distinct purposes:
Polkadot token holders have complete control over the protocol. All privileges, which on other platforms are exclusive to miners, will be given to the Relay Chain participants (DOT holders), including managing exceptional events such as protocol upgrades and fixes.
Game theory incentivizes token holders to behave in honest ways. Good actors are rewarded by this mechanism whilst bad actors will lose their stake in the network. This ensures the network stays secure.
New parachains are added by bonding tokens. Outdated or non-useful parachains are removed by removing bonded tokens. This is a form of proof of stake.
What are the functions of DOT within Polkadot?
DOT will serve three key functions in Polkadot, namely (i) providing governance for the network, (ii) operating the network, and (iii) creating parachains by bonding DOT.
The first function of DOT is to entitle holders to complete governance control over the platform. Included in this governance function is determining the fees of the network, the auction dynamics and schedule for the addition of parachains, and exceptional events such as upgrades and fixes to the Polkadot platform. These functions are not formally granted to DOT holders, but rather the underlying code of Polkadot will enable DOT holders to participate in governance.
The second function of DOT will be to facilitate the consensus mechanism that underpins Polkadot. In order for the platform to function and allow for valid transactions to be carried out across parachains, Polkadot will rely on DOT holders to play active roles. Participants will put their DOT at risk (referred to as “staking” or “bonding”) to perform these functions, which acts as a disincentive for malicious participation in the network. DOT required to participate in the network will vary according to the activity undertaken, the duration DOT is staked for, and the total number of DOT staked.
The third function of DOT will be the ability to add new parachains by tying up DOT (referred to as “bonding”). The DOT will be locked during their bonding period and will be released back to the account that bonded them after the duration of the bond has elapsed and the parachain is removed.
What rights will DOT confer on their holders?
DOT holders will have certain functions within the Polkadot platform, including:
- The ability to act as a validator, collator, nominator or fisherman.
- The ability to participate in the governance of Polkadot.
- The ability to be a collator for a parathread by making bids for block inclusion that are denominated in DOT.
- The ability to participate in the decision-making process in relation to global upgrades and/or changes to Polkadot.
Understanding the technology – Connecting the dots
The heart of Polkadot, responsible for the network’s shared security, consensus and cross-chain interoperability.
Sovereign blockchains that can have their own tokens and optimize their functionality for specific use cases.
Similar to parachains but with a pay-as-you-go model. More economical for blockchains that don’t need continuous connectivity to the network.
Allow parachains and parathreads to connect and communicate with external networks like Ethereum and Bitcoin.
Secure the Relay Chain by selecting trustworty validators and staking dots.
Secure the relay chain by staking dots, validating proofs from collators and participating in consensus with other validators.
Maintain shards by collecting shard transactions from users and producing proofs for validator.
Monitor the network and report bad behavior to validators. Collators and any parachain full node can perform the fisherman role.
Elected to represent passive stakeholders in two primary governance roles: proposing referenda and vetoing dangerous or malicious referenda.
Composed of teams actively building Polkadot. Can propose emergency referenda, together with the council, for fast-tracked voting and implementation.
Built with the best technology
Polkadot’s relay chain is built with Substrate, a blockchain-building framework that is the distillation of Parity Technologies’ learnings building Ethereum, Bitcoin, and enterprise blockchains.
Polkadot’s state machine is compiled to WebAssembly (Wasm), a super performant virtual environment. Wasm is developed by major companies, including Google, Apple, Microsoft, and Mozilla, that have created a large ecosystem of support for the standard.
Polkadot’s networking uses libp2p, a flexible cross-platform network framework for peer-to-peer applications. Positioned to be the standard for future decentralized applications, libp2p handles the peer discovery and communication in the Polkadot ecosystem.
The Polkadot runtime environment is being coded in Rust, C++, and Golang, making Polkadot accessible to a wide range of developers.
Processing transactions in parallel
Parachains are specialized blockchains that connect to Polkadot. They will have characteristics specialized for their use cases and the ability to control their own governance.
Interactions on parachains are processed in parallel, enabling highly scalable systems.
Transactions can be spread out across the chains, allowing many more transactions to be processed in the same period of time.
Polkadot is solving many of the problems that have held back blockchain technology so far — all in one place, without compromising.
A better security model
In both Proof-of-Work and Proof-of-Stake systems, blockchains compete with each other over resources to secure their networks, and blockchains are easily attacked until they develop a significant community to support their network.
Polkadot takes a different approach by letting blockchains pool their security, which means that the blockchains’ security is aggregated and applied to all.
By connecting to Polkadot, blockchain developers can secure their blockchain from day one.
Transparent on-chain governance
Updates to the protocol happen fork-free via transparent on-chain voting, so protocol development never stalls due to the lack of a clear process. The relay chain uses a sophisticated governance mechanism that is designed to establish a transparent, accountable and binding process for resolving disputes and upgrading the network.
DOT tokens are used to participate in governance decisions, including tabling proposals, voting, and bonding.
Parachains are free to design their own governance mechanisms, allowing for maximum freedom without affecting other parachains.
GRANDPA: a trustworthy consensus algorithm
Polkadot uses its original GRANDPA (GHOST-based Recursive Ancestor Deriving Prefix Agreement) consensus for a more secure and resilient network.
Under good network conditions, GRANDPA can finalize blocks nearly instantly. Under bad network conditions, like a network partition, GRANDPA can finalize large quantities of blocks (theoretically millions) at once when the partitions resolve.