Polkadot or as it is commonly referred to as DOT is nothing but an open-source protocol with a multichain structure that uses a separation method and facilitates the cross-chain transfer of not only tokens but of any data or asset types, thus making a wide range of blockchains that are compatible with one another.
Polkadot is designed to allow individuals to retake ownership of their digital information to powerful external companies by enabling the web where our data is securely protected from central authorities and online monopolies. By providing the foundation for layer-1 blockchains ecosystem, Polkadot empowers new business models, services, organizations - even entire communities and economies - to shape and succeed in the future. In short, Polkadot aims to deliver on the promise of a revolution in blockchain technology, provide a way for intentionally built blockchains to connect within a dangerous ecosystem, and open secure cross-chain communications.
In more easy words, Polkadot is a “blockchain series” that allows different types of chains to operate and securely interact with each other within the same ecosystem.
The Origin of Polkadot is the brainchild of Dr. Gavin Wood, co-founder of Ethereum and co-founder of Solidity's smart contract language. Dr. Wood began working on his idea of "designing a sharded version of Ethereum" in mid-2016 and released the first draft of Polkadot's whitepaper in October 2016. The other founders are Robert Habermeier and Peter Czaban.
In 2007, Dr. Wood and Czaban founded the Web3 Foundation to support Polkadot's research and development and to oversee its fundraising efforts. In late 2017, Polkadot formed the ICO, based on Dr. Gavin Wood's Polkadot Whitepaper. Funds would be raised from the Web3 Foundation, founded in Switzerland by Wood and Czaban, to oversee the development of Polkadot. ICO has raised $144 million for tens of thousands of community members, along with other major firms such as Polychain Capital, Fabric Ventures, Pantera Capital, Boost VC, and Fundamental Labs. The latest private auction in July 2020 raised $43 million, hosted by BnkToTheFuture.
Polkadot's goal is to allow for the development of a Divided Web, where users have full control as they capture their data and secure their applications to any central authority.
From a more technical point of view, Polkadot was developed to correct Ethereum's shortcomings without damaging its ecosystem. Polkadot is divided into areas, on-chain governance, and the ability to develop or fix bugs without a fork.
Polkadot has four major components including Relay chain, Parathread, Parachains, and Bridges.
· Relay Chain is considered the heart of Polkadot and helps create shared security, compatibility, and collaboration across the network through various chains.
· Parachains, on the other hand, are said to be independent chains with their own token and may be prepared for specific use cases.
· Parathreads are almost like parachains, with flexible connections built on top of the pay-per-view model as you go out.
· Bridges, as the name suggests allow parathreads and parachains to connect and interact with external blockchains as in the case of Ethereum.
The use cases of Polkadot are:
· Governance: Polkadot token holders have complete control over the protocol. All rights, in some jurisdictions belonging to miners only, will be granted to Relay Chain participants, including the administration of special events such as protocol development and maintenance.
· Staking: Game theory encourages token holders to behave responsibly. Good actors are rewarded with this system while bad actors will lose their share in the network. This confirms the safety of the network.
· Bonding: New parachains are added with the help of bonding tokens. Expired or unused parachains are removed by issuing bonded tokens. This is a type of proof of stake.
There are more than 350 projects on Polkadot, some of them are:
PolkaBTC Bridge Mutual
TerraUSD and LUNA both collapsed and as a result, a number of crypto platforms folded in the aftermath
A VC firm is among the first to establish Polkadot Ecosystem Fund
Parachains gets officially launched on Polkadot Network
Upcoming parachain auctions take Polkadot to higher levels
China closes financial, payment, and cryptocurrency trading institutions
Considering the full benefits for entrepreneurs, developers, users, and investors, it looks like the emergence of Polkadot will be interesting to follow. DOT acting as a protocol management token and encouraging participation to protect new networks or bonds is a clear indication that the project aims to promote use by rewarding participants. Indeed, DOTs have become established as one of the most important incentives in the crypto environment, with an average annual yield of 10%.
Because there is no complete blockchain that can support all operations in the crypto world, Polkadot will help the development of chains become more unique, creating a more efficient network. Designed for people who know the best about crypto development, Polkadot's ability in the future is worthy of trust.
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