Polkadot was founded by one of the Ethereum cofounders, Dr. Gavin Wood. Being the Chief Technical Officer at Ethereum, Gavin realized that Ethereum was impotent to serve as the world computer due to the scalability issues.
He then started his own project, Polkadot, that comes with all the features needed to become the world computer. In this article, we will discuss the killer features that only Polkadot and substrate offer to users and developers. Let’s start with a brief overview.
Overview
Polkadot is a layer-0 meta protocol that enables interoperability among the blockchains connected to it. Polkadot uses a relay chain-parachain model. The relay chain is the heart of the network and responsible for governance, providing security, and enabling interoperability among the connected chains, called parachains.
Parachains are application-specific chains built using the Substrate framework that specialize in a specific feature. These parachains outsource their security to the Polkadot relay chain, and this allows them to be highly scalable and decentralized.
To connect to the relay chain as a parachain, a project must win a parachain slot auction held in DOT token. The project with the highest bid secures a parachain slot and lives under the security umbrella of Polkadot.
Let’s discuss some of the killer features of Polkadot that make it stand out from other projects.
1. Shared Security
For a new PoS chain with a small market cap, it is a legitimate threat that a whale could acquire a huge amount of tokens and harm the network. On acquiring 33.3% of the stakes, a bad actor could manipulate transactions, and on acquiring 51% of the stakes, he could pass a governance proposal to drain the community pool or any other malicious proposal. Thus, dApp developers would hesitate to deploy their dApp on such new PoS chains, and without deployment, the chain would not grow in value. The cycle goes on and on.
Polkadot solves this problem with its shared security feature. The shared security means all the connected parachains leverage the security of the Polkadot relay chain, irrespective of their market cap. The blockchain with a $1 million market cap is as secure as the relay chain with an $8 billion market cap. The new chains don’t need to bootstrap their validator set for security. Instead, it allows them to focus on what they are best at, i.e., building.
The shared security allows parachains to outsource their security to the Polkadot relay chain and be highly scalable and decentralized.
2. Forkless Upgrades
“Neither the strongest, nor the wisest. But one who is fastest to adapt to changes will survive.”
In this rapidly advancing world, if you’re not upgrading yourself with the technology, you will simply be left behind. Thus, there should be a mechanism for chains to upgrade their logic effortlessly. To make your chain future-proof, Polkadot offers forkless upgrades.
Generally, for an upgrade, chains require a hard fork where the validators who fail to update their softwares, knowingly or unknowingly, are left behind on the old chain. This at times causes the validators to split into two forks, which reduces the security of blockchains.
Polkadot’s forkless upgrade feature allows chains to upgrade their logic without going through traditional hardforks. Updating a chain is as simple as updating a mobile app. This ease of update makes the chains future-proof. To date, the Polkadot relay chain has been forkedlessly upgraded 40+ times without going through a validator or security split.
With forkless upgrades, the relay and parachains could be upgraded when needed, making them future-proof. On the other hand, chains like Ethereum and Cardano have to go through hardfork every time they need to upgrade their logic. Recent examples are the Ethereum 2.0 upgrade, which led to two forks: ETH PoS and ETH PoW.
3. Trustless communication
As the current situation is, to send tokens from chain A to chain B, chain A needs to trust chain B that it won’t mint more or less tokens. There is a need for trust while transferring tokens.
The Polkadot parachains, however, could transfer tokens to other parachains and the relay chains without requiring trust. This is possible because of the shared state feature of Polkadot. The state transition proof of all parachains is finally verified by the relay chain validators. Thus, all the chains share state with the entire system, and this makes the trustless transfer of assets possible.
4. XCM transfer protocol
Generally, we need blockchain bridges to transfer tokens across chains, which involves centralized custodians and multi-sigs and is risky. According to Cointelegraph, more than $2.5 billion in assets have been lost in bridge thefts. The Ronin bridge hack and the Nomad bridge hack are some of the biggest hacks to date.
XCM is a messaging protocol that defines how a message should be composed, delivered, and interpreted by the destination chain. XCM uses “state channels” to transfer tokens across channels that are as secure as the relay chains. The XCM protocol removes the need for centralized custodians, preventing any sort of hack. With XCM, users can send tokens across parachains and the relay chain under the security of the Polkadot relay chain without the risk of their tokens getting lost.
5. Software, not security
Recently, the Web3 Foundation announced that the SEC has classified Polkadot as software and no longer a security. Now, big US institutions could keep $dot in their treasury and use it as collateral to obtain loans. With this, $dot is the only crypto token after $btc that is not a security. This would encourage projects to build on Polkadot as parachains or parathreads, ultimately leading to massive adoption.
6. On-chain governance
Polkadot has one of the best implementations of on-chain governance. The token holders elect a council of members with power. Anyone can run for council; however, the token holders decide whether or not the candidate must be elected. The council has the power to veto the token holders.
In addition, there is time-based voting, where the voting power increases when the user locks tokens for a longer time. This is referred to as “conviction voting”. The utilization of on-chain treasury is decided by the governance process. The self-funding treasury is used to finance innovative new ventures, liquidity bootstrapping events, and for other productive initiatives like WagMedia.
7. Network Effects
Polkadot uses a relay chain-parachain model. The relay chain can support as many as 100 parachain slots. Additionally, there are parachain slots reserved for nested relay chains, which will have their own network of interconnected chains and parathreads.
Parathreads are technically the same as parachains but differ in economic aspects. A single parachain slot could be shared by up to 50 parathreads. Learn more about Parathreads.
Imagine a network of 100+ application-specific L1 blockchains that are interoperating with each other in a trustless manner using XCM. The L1 chains will have their own ecosystem of L2 and dApps, all secured by the multibillion-dollar security of the Polkadot relay chain. The network effects this would generate would be incomparable to any other ecosystem, which can only be underestimated right now.
8. Developer activity
Not a feature in itself, but a crucial metric to look out for before investing in a project. Developer activity tells the amount of development or innovation happening in the project, higher the development activity, more significant is the project.
Polkadot has the second highest amount of developer activity of any other crypto ecosystem. Since 2021, Polkadot has had the second-largest developer community after Ethereum. According to a report by Messari, Polkadot’s weekly commits were three times the developer activity of the next project. For this reason, Polkadot is also referred to as the “engineer powerhouse.”
Conclusion
I hope this article was helpful in clearly explaining the leading features that make Polkadot stand out from the crowd. Polkadot, with cutting-edge features like shared security, XCM, and forkless upgrades, is the leader of the interoperability sector. The previous bull run was fueled by the speculation of parachain auctions. But now, Polkadot supports 25+ parachains that interoperate with each other trustlessly and have hundreds of millions of dollars’ worth of value locked in them. Developer activity is at an all-time high in the Polkadot ecosystem, and with the implementation of parathreads and asynchronous backing, the ecosystem will skyrocket.
Important Links
Polkadot website: https://polkadot.network/
Polkadot wiki: https://wiki.polkadot.network/
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