Updated: Aug 10, 2022
Polkadot is a scalable blockchain that ensures network interoperability and a secure decentralized open-source protocol for connecting different chains (multi-chain framework).
It was one of the most innovative projects for stakeholders because it tried to solve two big problems: scalability and security.
Its key strengths are:
fill the lack of interoperability;
reduce the high cost of gas fees and shardings;
encourage the mass adoption of blockchain.
Polkadot was conceived in 2016 as a sharded version of Ethereum and created by Gavin James Wood, an English computer scientist and the co-founder of Ethereum, who has proposed and helped to develop Solidity, a programming language for writing smart contracts.
A dip dive into this network
Polkadot’s architecture is innovative and flexible; it uses a powerful development tool, the Substrate, a modular building framework that allows users and developers to customize the chain’s architecture, bridging blockchains with other networks, including the previous-generation networks such as Ethereum and Bitcoin. All chains that use Substrate are compatible with Polkadot and its ecosystem of parachains applications.
The structure of the Polkadot’s network it’s made up of:
The Relay Chain, the heart of Polkadot. It’s responsible for the network’s shared security, consensus, and cross-chain interoperability.
Parachains (parallelized chains), sovereign blockchains that can have their tokens and optimize their functionality for specific use cases.
Parathreads are similar to parachains but built as a pay-as-you-go model. As a result, these chains are more economical for blockchains that don’t need continuous connectivity to the network.
Bridges allow parachains and parathreads to connect and communicate with external networks.
The protocol of Polkadot is based on a consensus mechanism, a slight variation of PoS, the so-called NPoS (Nominated Proof of Stake). It guarantees decentralization and fair representation through justified proportional representation, providing high security through maximum support.
In NPoS, all validators in the active set receive the same amount of rewards. From these rewards, the validator's commission is deducted. Then, the remaining rewards are distributed among the nominators in proportion to their participation. At this point, the system works identically to Proof of Stake (PoS).
The organization of Polkadot’s network is focused on three elements that are:
Nominators who secure the Relay Chain by selecting trustworthy validators and staking dots.
Validators who secure the Relay Chain by staking dots, validating proofs from collators, and participating in consensus with other validators.
Collators who maintain shards collect user shard transactions and produce proofs for the validator.
Polkadot’s governance is divided into two groups:
Council Members are elected to represent passive stakeholders in two primary governance roles: proposing referenda and vetoing dangerous or malicious referenda.
Technical Committee is composed of teams actively building Polkadot. Can propose emergency referenda, together with the council, for fast-tracked voting and implementation.
DOT, the economic heart of Polkadot
DOT is Polkadot’s network native coin; the smallest unit is a Planck.
It facilitates payments, network governance, staking, reward incentives, transaction fees, and other bonding processes – where tokens are locked up as part of connecting new chains to the Polkadot network or taking on another role in the ecosystem.
To understand more about DOTtoken and DOTMarketCap, read our Market Discovery.
If you want to go deeper into DOT visit https://academy.binance.com/en/articles/what-is-polkadot-dot
The decentralized stablecoin of Polkadot: aUSD
aUSD (Acala USD) is a decentralized, multi-collateralized stablecoin that serves as the native stablecoin of the Polkadot ecosystem. It’s powered by Acala, a customized blockchain application for powering liquidity, economic activity, and stablecoin utility.
Acala USD is pegged to the US Dollar, and it can be integrated by any blockchain connected to Polkadot and its applications. Still, it can also be integrated cross-chain on any other connected blockchain network.
If you want to read more about aUSD, actual price, and features, visit https://www.coincarp.com/currencies/acaladollar/
There are different types of DOT wallets that you can choose; the official one advised by this ecosystem is Polkadot-JS, which works from within your internet browser. It allows you to send, receive, and store DOT and Polkadot ecosystem tokens and participate in staking and voting.
Polkadot is not a smart contract platform, it provides the infrastructure for the decentralized app (dApp) to integrate smart contracts across an interoperable network of wide-ranging functionality.
Polkadot is a young but rich ecosystem with more than 450 developed projects, and it paves the way for broader global blockchain adoption.
Thanks to Polkadot, many things are changed in the cryptocurrency industry, and many others will change.
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