Polkadot (Polkadot) is a well-known public chain with a wide range of popularity and influence. Ge himself also recognizes Polkadot’s team and design philosophy, and has always paid attention to Polkadot. Although Brother Ou is not a senior researcher of Polkadot, he still wants to do his best to make some popularization, hoping to help everyone.
1. Basic introduction to Polkadot
Polkadot is a project that started in 2016. After a long period of research and development, the mainnet launch process was officially launched at the end of May this year. So far, the mainnet has not yet achieved the “available” state, that is, the state in which applications can be run as we often say.
Gavin Wood, the founder of Polkadot, is well-known in the industry. He has a series of auras such as the co-founder of Ethereum, the former chief technology officer of Ethereum, and the author of the “Ethereum Yellow Book”. He is a top developer with the same name as V God. The development strength of the Polkadot team is undoubtedly the top team in the industry.
We can always see the Web3 Foundation in the news about Polkadot. Here is an explanation. The Web3 Foundation is a Swiss company founded by Gavin Wood and established in accordance with the Swiss Civil Code. Its core focus is the development, deployment and maintenance of “Web3”. The Web3 Foundation has funded a large number of “Web3” related projects (mainly the Polkadot Ecosystem), and getting funding from the Web3 Foundation is of great significance to many projects.
2. The three cores of the Polkadot network
Polkadot is a scalable heterogeneous multi-chain system. The Polkadot network can be divided into three parts: relay chain, parachain and transit bridge.
First look at a very classic picture of Polkadot
The center of the above figure is the relay chain, and its core is the validator cluster. The relay chain only provides simple services that meet the functions of the relay chain. Developers can build applications based on the main chain. This is to ensure that the design of the relay chain is simple enough. ,robust. Because we all know that the simpler the design, the lower the chance of problems.
The relay chain is very important in the Polkadot system. The security of all parachains is the responsibility of the relay chain. This is also a major feature of Polkadot-shared security.
The uppermost part of the picture above is a parachain. Parachains can individually design various mechanisms on their own chains, with high autonomy.
Parachain has its own nodes. These nodes are called collectors. The task of collectors is to collect and execute transactions, create an “unsealed” block and submit it to the validator. The verifier checks, verifies whether the transaction submitted by the collector is legal, and approves it. This means that the validator is responsible for the security of all parachains, because all transactions are approved by the validator of the relay chain, the validator is fine, and all parachains will have no problem.
The transit bridge is a special parachain responsible for linking the Polkadot network with external networks. Because of the different structures, networks such as Bitcoin and Ethereum cannot access the Polkadot network through the parachain. However, the interconnection between the Ethereum, Bitcoin and other networks and the Polkadot network can be realized through the transit bridge.
3. The four basic roles of the Polkadot network
The Polkadot network can be simply understood as being maintained by four roles : collator, validator, fisherman, and nominator .
Collectors belong to parachains, and each parachain will have its own collectors, which may vary in number. For example, there are currently 120 collectors in Stafi and 47 collectors in Darwinia. As mentioned above, the collector is mainly responsible for collecting and executing the transactions corresponding to the parachain, and then submitting the block to the validator for approval.
The validator is elected by the nominator, and the nominator is the currency holder. Verifiers will be randomly assigned to parachains to verify and approve blocks submitted by parachain collectors. Verifiers who maliciously or fail to complete their own tasks will be punished, and nominees who vote for them will also suffer losses.
The verifier is very important in the Polkadot system, so there is actually a more complicated design for the supervision of the verifier. At the same time, the dispersion of validators is also very important. At present, Polkadot has 222 validators. It is expected that the number of validators will expand to 1,000 in the future.
Phishers are the supervising nodes in Polkadot to supervise validators and collectors. The interaction diagram of the four roles in the Polkadot white paper is as follows. Phishers are responsible for monitoring malicious behaviors in the system and can receive rewards. The requirements for running phisher nodes are not high. The income of phishers will gradually increase as the number of successful reports increases. This is used to prevent the initial excessive incentives that cause the phishers and their characters to collude and deliberately violate regulations to obtain rewards.
But if we look at the picture below, we can see that the phisher belongs to the parachain community. From the picture, we will think that the phisher is supervising the collector rather than the validator. This seems to conflict with the above picture. .
In fact, in Polkadot, if the validator does evil and is enforced by the phisher, there is a premise here that the collector submits an illegal block, and the collector and validator are in collusion. So in fact, the phisher has supervision over the collector and verifier. Moreover, the collector itself can be a phisher, and can supervise other collectors and verifiers, and will also receive rewards.
Fourth, how to connect the parachain to the relay chain
The Polkadot system provides unified security for parachains through the relay chain. Parachains can save a lot of costs in maintaining network security and focus on business development.
But any public chain resources are limited, and Polkadot is the same. Therefore, if you want to access the relay chain and enjoy the security of the entire Polkadot network, you need to rent a parachain slot to share the security of the entire network.
Parachain slot positions are limited, and slot users need to participate in the auction to obtain it. The lease of the slot needs to lock the Polkadot token DOT, because the amount of locked funds will be relatively large, and it is difficult for the project party to take out enough tokens for lease alone.
Therefore, there is an IPO mechanism in the Polkadot system, and the project party can mobilize community users to bid for slots together. Users need to lock their DOT for a certain period of time to participate in the auction, and users will have an opportunity cost and loss of staking income. Therefore, the project party will give out its own tokens to the community users who participate in the auction.
The upper limit of the slot duration is 2 years, each stage is divided into 6 months, and it needs to be leased again after expiration. Therefore, how to obtain sustainable funds for slot leasing through development is what the project party needs to consider. Because leasing is always relying on the distribution of tokens, it is not a long-term solution.
Parachain slots will not be auctioned a lot at once, but one will be auctioned every once in a while. There is no definite time for the specific interval. From the relevant introduction, it is generally said that the auction is held every few weeks.
Regarding the number of slots, Polkadot’s current goal is to support up to 100 parachains. Speaking of which, I can mention the TPS of the Polkadot network. According to a tweet from Polkadot founder Gavin Wood on June 9th, all Substrate-based chains can reach a TPS of 1500. The goal that the Polkadot network wants to achieve is to support 100 parallel chains. In theory, the maximum TPS of the entire network can reach 150,000.
But in fact, the parachain connected to the relay chain itself can also become a “secondary relay”, and the secondary relay can also be connected to the parachain. It is difficult to imagine the upper limit of the parachain that can be connected here.
5. Parachain slot auction
Slot auctions will start on Polkadot’s permanent advance network Kusama. From the current news, although it will take a while, it will not be too long.
Kusama is Polkadot’s permanent advance network, using basically the same code as Polkadot, but any new features will be launched on Kusama first to verify the feasibility. If it is verified that there is no problem and all parties respond well, it will be added to the Polkadot network.
Kusama is an independent network with independent tokens and communities, not a testnet in the traditional sense. Because the testnet can be operated at will, but the operations on Kusama are also real money, which will be a completely real test environment for Polkadot.
There are already many projects ready to participate in the Kusama slot auction. If you think the main chain is too expensive, building on Kusama is also a good choice. Moreover, in the future, Kusama will be connected to the Polkadot network by means of a transit bridge, and applications on Kusama can also communicate with the Polkadot network.
Six, Polkadot’s cross-chain
When it comes to the characteristics of Polkadot, many people think of cross-chain. Indeed, one of Polkadot’s characteristics is cross-chain. The Polkadot network can achieve heterogeneous cross-chain through the relay chain. Heterogeneity means the cross-chain between two different chains.
Polkadot mainly transmits messages through the cross-chain messaging scheme (XCMP). Let’s briefly understand the specific principles. Parachain A and Parachain B need to carry out cross-chain communication, referred to as A and B.
A initiates a cross-chain and deposits 1 token A into B’s contract on the A chain.
The transaction is propagated to B through the relay chain.
B confirms through the relay chain that A has performed the relevant operation, and B performs the corresponding operation, and generates the corresponding amount of A’token on B.
The same goes for reverse cross-chain.
The key here is the decentralization of the whole process, not the cross-chain of trusting third parties as we often say. The approval of transactions on the Polkadot network is carried out by random validators, so the deposit and withdrawal of mortgage assets are all responsible for the security of the decentralized validator cluster. Its cross-chain security is equivalent to the security of the entire Polkadot network.
But for a network like Bitcoin without smart contracts, cross-chain will be more complicated. Bitcoin is cross-chain. At present, the custody of Bitcoin generally uses a multi-signature method. In fact, it is still trusting a third party.
But recently I saw Darwinia say that they have implemented decentralized bridging technology, and Bitcoin can also achieve cross-chain that eliminates third-party participation. This is worth taking a good look at, and I will talk about it later.
Seven, a brief description of Polkadot DeFi ecology
The most common project in the Polkadot ecosystem is infrastructure, which is far away from ordinary users, so I won’t introduce more. DeFi is a field closer to users and is also highly anticipated. Here is a brief introduction.
Polkadot’s DeFi ecoregion brother is still looking forward to it, but there are few projects we can see at present, and we hope to see more in the future.
1) Acala
Acala is a relatively large DeFi protocol in the Polkadot ecology. It is widely sought after by institutions and is also very good in community construction. Acala defines itself as: “a decentralized financial center and stablecoin platform that provides support for cross-blockchain liquidity and applications”.
Acala has three main businesses: stablecoin generation platform, liquidity release protocol and DEX trading platform. The three coordinate with each other and help each other develop. The most important of these is the stablecoin generation platform. So Acala is a multi-protocol comprehensive DeFi platform, and if it succeeds, it will have a deeper moat.
Official website: https://acala.network/
2) ChainX
ChainX is the earliest Substrate chain in China. The mainnet went online very early. When it went online, it started to recharge BTC mining activities, which also caused a big wave of enthusiasm at that time. ChainX wants to become a cross-chain hub for digital assets. As stated in the vision of a cross-chain hub, ChainX has always been doing cross-chain work for digital assets.
In the BTC cross-chain, most of the bitcoins are stored in multi-signature at present. ChainX believes that this storage model is not decentralized enough, and will solve this problem after the slot is connected to Polkadot’s main network, and it will also achieve full currency cross-chain.
At the same time, in addition to cross-chain, ChainX wants to become a secondary relay of the Polkadot ecology, attracting applications that do not want to rent slots on their own to develop on the ChainX network.
Official website: https://chainx.org/
3) Darwinia
Darwinia is similar to ChainX, both of which are mainly cross-chain projects. However, Darwinia’s cross-chain direction covers a wider range. It not only includes the cross-chain of assets such as ETH, but also the cross-chain of game assets and non-standard assets. , Application chain and cross-chain business.
The Darwinia mainnet is divided into four stages. The second stage “Ethereum-Darwin one-way cross-chain bridge” has been completed. The third stage will open the “Ethereum-Darwin two-way cross-chain bridge/transfer”, and the fourth stage Open “multi-directional cross-chain”, and the subsequent cross-chain will expand to CRAB Network, TRON, BSC, EOS, etc.
According to the latest official information, the Darwinia network has implemented a decentralized bridging technology, which can achieve a completely decentralized cross-chain of Bitcoin.
Darwinia itself has also developed a blockchain management game “Evolution Planet”, which predates the Darwinia network. Before the Darwinia mainnet went live, Evolution Planet assumed the staking function in disguise.
Official website: https://darwinia.network/
4) Stafi and Bifrost
Stafi and Bifrost are basically doing similar businesses, and both want to release the liquidity of Staking assets.
Users who staking through their network can obtain corresponding staking certificates. For example, if users staking DOT, they will be able to obtain rDOT, which is tradable and tradable, and can also obtain staking income. Acala’s LDOT is also a similar model.
According to statistics on September 27, the total market value of PoS assets shown on the Stakingrewards platform was 32 billion U.S. dollars, the market value of Staking assets was 16.8 billion U.S. dollars, and the average mortgage ratio was 52%. This does not include the future PoS leader Ethereum, and other PoS public chains that are not online.
Staking assets are 16.8 billion U.S. dollars. Assuming that this model is a big success, 50% of users re-mortgage through Stafi and obtain liquidity, which will release 8.4 billion U.S. dollars of liquidity. If this model makes users who originally wanted to staking but worried about liquidity also started staking, raising the industry average mortgage rate to 80%, this new 30% is about 9.6 billion US dollars. This will be a big market.
According to official Bifrost news, Bifrost will provide liquidity release services for users participating in the bidding of parachain slots, that is, users who participate in the bidding through Bifrost can obtain bidding rewards while maintaining liquidity.
Official website: https://bifrost.finance/
Official website: https://www.stafi.io/
More information about Polkadot DeFi can be found here.
8. Summary of Polkadot Common Tools
Official website:
https://polkadot.network/
wallet:
Domestic Maizi Wallet and imToken support the Polkadot network, which is more in line with the habits of Chinese people
Encyclopedia:
https://wiki.polkadot.network/en/latest/
Project Encyclopedia:
https://www.polkaproject.com/
Chinese community (official/community public account):
Polkadot_China, PolkaWorld
Navigate the website:
https://www.polkaworld.org/explore/
Chinese white paper:
https://www.polkaworld.org/articles/polkadot-white-paper-in-chinese
Browser:
https://polkadot.subscan.io/
https://polkadot.js.org/apps/#/explorer/
https://polkascan.io/
This is the end of Polkadot’s introductory guide. The level is limited. If there are any errors, please correct me.
