Author: Coin Bureau Editorial team, compiled by: OneBlock+

• White Paper and Initial Concept (2016):Polkadot White Paper by Gavin Wood Released in 2016, it outlines many innovative multi-chain frameworks.

• Web3 Foundation Launched (2017): The Web3 Foundation was launched to promote a fully functional and user-friendly decentralized web. It plays a key role in funding and guiding the development of Polkadot.

• ICOs and Fundraising (2017):Polkadot’s initial coin offering (ICO) in 2017 was one of the most successful at the time, Raised more than $140 million. However, a large portion of the funds were frozen due to the Parity wallet vulnerability.

• Development Milestones (2018-2019):Polkadot went through various stages of testing and development, launching the experimental Canary Network Network) - Kusama Network.

• Mainnet Launch (2020):Polkadot mainnet launched in 2020 with limited network functionality in the first phase. In subsequent phases, Polkadot rolled out full functionality, including enabling governance, staking and staking capabilities.

• Parachain Launch and Auction (2021-2022):The introduction of parachains is a key feature of Polkadot, starting with the auction of these slots, Marking an important step in realizing Polkadot's multi-chain architecture.

• Web3 Foundation announces DOT token is no longer a security (2022): After years of discussions with the SEC, Polkadot announces DOT It is software, not a security.

• Polkadot 2.0 (2023): New technical update marks the end of the parachain slot auction, one of the most important events in crypto , enabling a more dynamic parachain market to be adopted.

• Cardano announces adoption of Polkadot technology (2023):At Cardano Summit 2023, Hoskinson announced that Cardano will use the Polkadot SDK for its partner chains .

Other founders:

In addition to Gavin Wood who is the core person in Polkadot development and the co-founder of Ethereum, Polkadot The founding team also includes several other well-known figures:

1. Robert Habermeier:Rust and important contributor to the blockchain community, and has been actively involved in the development and conceptualization of Polkadot technology.

2. Peter Czaban: Former technical director of the Web3 Foundation, who played an important role in guiding the foundation's mission and overseeing the development of Polkadot technology.

These founders have brought unique technical highlights and vision to the project, developing Polkadot into a scalable, interoperable and a secure multi-chain ecosystem. Their efforts are key to Polkadot’s continued growth in the blockchain space.

DOT Token ICO and Funding Round

Polkadot’s DOT Utility Token Initial Coin Offering Still Remains In the memory of many veterans in the crypto asset space, the same is true for the Polkadot team. The DOT ICO was held in October 2017 and raised over $145 million on Ethereum.

Snapshot from Polkadot ICO, image from Trustnodes

The initial supply of DOT is 10 million, half of which will be distributed in two rounds to  The initial price of $28.8 was sold to public and private investors (2.25 million and 2.75 million respectively).

However, in August 2020, DOT underwent currency revaluation after a community vote, which actually resulted in an increase of 100 DOTs per DOT holder. The reprice results in an actual ICO price of $0.29 for DOT tokens.

Shortly after the ICO price adjustment, funds raised of  over $9,000 were permanently frozen due to the exploitation of a vulnerability in the Polkadot multi-signature wallet code. A week after the incident, the Polkadot team confirmed that despite the funds being frozen, there was still enough money to develop Polkadot. Despite efforts to recover the funds,over 500,000 ETH are still locked.

The first Polkadot wallet was hacked, picture from Steemit

Collector

Collectors assist validators in reaching consensus by constructing parachain blocks, and collectors maintain full nodes of specific parachains and full nodes of relay chains. As full nodes of a parachain, they retain all necessary information, such as transaction data, signatures, and state transitions, to build parachain blocks. They collate and execute parachain transactions to create parachain blocks; provide these blocks to the one or more validators who proposed the parachain blocks, along with zero-knowledge proofs of the validity of the parachain transactions.

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The location of collectors in the Polkadot network, picture from Polkadot Wiki< /span>

Polkadot Consensus

The Polkadot Relay Chain uses a novel Nominated Proof of Stake (NPoS) consensus process to secure blocks , designed to optimize network security and efficiency. Here's how it works:

• Roles: NPoS involves two main actors:

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Validator: Responsible for verifying transactions and maintaining the blockchain.

• Nominators: Help secure the network by supporting trusted validators to stake tokens.

• Nominate a validator :Token holders can nominate trusted validators. The process involves staking Polkadot’s native token DOT.

• Validator election: The election mechanism selects validators from the pool of nominees. This process takes into account the amount of stakes supporting each validator to ensure a balanced and secure network.

• Staking rewards and risks: Both validators and nominators will receive staking rewards proportional to their staked amount. However, they also share a common risk: any malicious behavior by the validator may lead to a slash, thereby losing part of the DOT.

• Security and Efficiency:NPoS is designed to maximize the amount of stake that protects the network and improve its security. Validators are incentivized to perform efficiently and honestly due to the financial stakes involved.

In summary, Polkadot’s NPoS is a complex consensus model that aligns the incentives of various network participants to maintain a secure , efficient and decentralized ecosystem.

Polkadot XCM(Cross-chain messaging)

The Polkadot Relay Chain uses a novel Nominated Proof of Stake (NPoS) ) consensus process to protect blocks, designed to optimize network security and efficiency. Here's how it works:

In the Polkadot ecosystem, XCM stands for Cross-Consensus Messaging. This is a protocol designed for communication between different blockchains (parachains) both inside and outside the Polkadot and Kusama networks. XCM enables these different blockchains to send messages to each other, albeit perhaps with different consensus mechanisms or state transition capabilities. Here are the details of how XCM facilitates cross-chain communication:

• Protocol Design:XCM is the language and format of messages. It is designed to be as general and abstract as possible to accommodate a wide range of potential use cases and blockchain designs.

• Message sending and receiving: Parachains can send XCM messages to another parachain without storing these messages on the relay chain .

• Cross-consensus compatibility: XCM is designed to be compatible across different consensus systems. This means that a blockchain using one consensus mechanism can communicate with another blockchain using a different mechanism.

• Use cases: XCM has a variety of uses and can include transferring tokens between parachains and calling smart contracts located on another parachain , or any other type of information or commands that may need to be communicated in a multi-chain environment.

• Decentralization and security: XCM leverages the Polkadot shared security model, ensuring that cross-chain communications are as secure as the internal operations of a single parachain.

In short, XCM in Polkadot implements interoperability functions between different blockchains in a safe, efficient and decentralized manner. Powerful tools, this is the cornerstone on which Polkadot is built. XCMP is the transport layer that delivers XCM messages. It provides transportation methods and safe routes, but does not provide a framework for binding protocols.

The process of XCM cross-chain messaging

In Polkadot, XCM facilitating cross-chain messaging involves multiple steps.

Here are the details:

• Message creation:Users or applications on the parallel chain initiate cross-chain operations and create XCM messages. This message is formatted to be universally understood across different parachains with different consensus mechanisms and state transition functions.

• Submission to local parachain: XCM messages are first submitted to the local parachain. Here it will be processed according to the rules of the parachain and prepared for transfer to another parachain.

• Relay chain participation: The local parachain forwards XCM messages to the Polkadot relay chain; the relay chain plays a core role in the Polkadot architecture , connects all parachains to each other and facilitates communication between them.

• Message routing: The relay chain routes messages to the target parachain, this routing is based on the information contained in the XCM message, which specifies the target Parachains and expected operations.

• Destination Parachain Reception: The destination parachain receives XCM messages from the relay chain, interprets the messages according to the logic, and performs the requested operation.

• Execution and response: The target parachain performs the operation requested in the XCM message, which may involve token transfers, smart contract execution, or other blocks chain operation.

• Feedback Loop: Depending on the nature of the cross-chain operation, the target parachain can generate a response or confirmation and send it back to the original using the same XCM protocol Parachain.

• Finalization: The operation is complete and any changes are finalized on the source and target parachains.

Throughout the entire process, Polkadot security and consensus mechanisms ensure the safety and reliability of cross-chain communication. The XCM protocol is designed as a universal and abstract messaging format that allows for a variety of cross-chain interactions in the Polkadot ecosystem.

How are parachains selected?

The Ethereum network is completely permissionless, which means that anyone can perform any operation on the network as long as they comply with the consensus process of the Ethereum protocol. As a result, developers have complete autonomy in deploying any smart contract they want on the Ethereum mainnet, including smart contract rollups.

The Polkadot network works slightly differently. The original vision of the project was just to allow high-quality and efficiently developed parachains to connect to the relay chain and benefit from its security. Therefore, Polkadot introduced a slot auction mechanism to regulate the number of parachains on Polkadot at any time. Here’s how auctions will look before the Polkadot 2.0 upgrade.

1. Purpose:

The slot auction is used to determine which parachains will be connected to the Polkadot relay chain, connected to the relay Chain allows parachains to benefit from Polkadot’s shared security and interoperability features.

2. Parachain Slots:

These are available locations on the relay chain for parachain connections. Each slot has a limited duration, usually ranging from a few months to a few years.

3. Auction process:

• Auction format:Polkadot uses a version of Candle Auction, a mechanism historically used for selling. The end of the auction is determined retroactively after the auction ends, making it difficult to cheat the system by bidding at the last minute.

• Bidding: Slot bidding is conducted by locking DOT tokens, with the DOT locked amount and lease period being factors in the bidding process.

• Random ending: Participants do not know the exact end time of the auction, which prevents last-minute bidding strategies.

4. Win the auction:

• Winner Determination:The winner is the item with the highest bid at the randomly selected auction end point.

• Lease a slot: Winning projects can rent a parachain slot for the bidding period; during this period, their parachain will be connected to Follow the chain.

• Locked DOT: DOT tokens bid in the auction are locked during the slot leasing period, they are not spent, but are used as a Deposit to ensure the position of the parachain on the relay chain.

5. Locking DOT:

The DOT tokens bid in the auction are inserted Slots are locked during the lease, they are not spent, but act as a kind of deposit to secure the parachain's position on the relay chain.

6. Crowloan:

• In order to collect enough DOT for bidding, projects usually use crowdlending, where they raise DOT from the community.

• If the bid is successful, crowdlending contributors may receive rewards from the project, such as tokens or project shares.

7. End of lease:

After the lease period ends, the parallel chain slot The auction will be held again and the locked DOTs will be returned to the project or its crowdlending contributors.

Slot auctions are a fundamental part of Polkadot’s governance and economic model, ensuring fairness and transparency in its allocation of limited resources (parachain slots) within the network.

Coretime in Polkadot(Coretime)

Polkadot network validators are dynamically assigned to validate different parachain blocks . Polkadot cryptographically random splits into subsets of each parachain via a set of validators, providing strong guarantees that these subsets will be different in every block.

Coretime refers to the availability of these subsets of validators as allocated computing resources (cores), and Polkadot currently supports  50 such cores. Each core can host a single parachain that utilizes all resources, or multiple parallel threads that utilize a portion of the available resources, with the cores running in parallel to handle multiple complex tasks simultaneously. Polkadot, also known as the“ Polkadot supercomputer ”, represents the collective ability to handle a large number of tasks.

Polkadot OpenGov - Democratic governance structure

Polkadot has recently been overhauled governance mechanism. It abandoned Governance V1 in favor of OpenGov, a more democratic and fair protocol governance format that cuts privileges and gives the DOT community a greater say. We recommend reading about Governance V1 (https://wiki.polkadot.network/docs/learn-governance) to understand the changes introduced by OpenGov.

Farewell to Governance V1

Polkadot’s first governance system consists of three main components: Technical Committee, Council and Public ( all token holders). The Technical Committee manages the upgrade schedule, while the Council is an elected body that handles parameters, management and spending proposals. While the public (token holders) play a key role in the governance process, the Council will scrutinize their proposals before they enter the voting stage.

While Governance V1 is effective at managing treasury funds and facilitating upgrades, it has some limitations. It allows only one referendum to be voted on at a time (except for emergency proposals), with the voting period lasting several weeks. The system tends to carefully consider a small number of proposals rather than broader ideas, which can limit the network's ability to adapt and grow quickly. V1 also limits the public's right to speak by imposing a council and having to obtain endorsements. The demand for greater decentralization and democracy led to the adoption of OpenGov.

Polkadot OpenGov

Polkadot OpenGov has made significant changes to address the shortcomings of Governance V1. The new system aims to further decentralize decision-making and increase the number of possible collective decisions at any given time. Key changes include:

1. Dissolution of the Board of Directors and Technical Committees: The Board of Directors collectively disbanded, and the Technical Committee was replaced by the broader Polkadot technical team.

2. Direct democratic voting system: Board responsibilities are transferred to the public, who can directly initiate new proposals.

3. Enhanced delegate delegation options: Users can delegate voting rights to community members in a variety of ways, allowing for more granular representation of stakeholders Interests.

4. Multiple Origins and Tracks: Proposals are now initiated by the public and enter different operating tracks according to their nature. Each track has a dedicated origin. The system allows for simultaneous voting on multiple referendums, making the governance process more flexible and responsive.

Note: For those who want to learn more, there is also an in-depth look at how OpenGov works: https://www.youtube.com/watch?v=Iv7b4ZxUzoM

 OpenGov architecture described in Polkadot Docs

In OpenGov, DOT holders Initiate all proposals. Unlike Governance V1, OpenGov allows the community to work on multiple proposals in parallel. OpenGov divides proposals into 15 categories of different origins based on what they aim to achieve. Each origin follows a specially crafted "track" that includes preset configurations to manage the voting process. The provenance and track system ensures that each proposal has full access to the community's time and resources.

Some governance proposals are time-sensitive and require decisive decisions, while others are more foundational and resource-intensive, requiring more thought and testing. OpenGov is a platform where all these different proposals do not compete for community attention and can be fully developed.

Key benefits of OpenGov:

• Decentralization ization:OpenGov shifts governance power from a central council to a more direct democratic model. By disbanding the Board of Governors and Technical Committees and handing their responsibilities to the public, OpenGov promotes a decentralized approach to decision-making.

• Inclusion and community empowerment: OpenGov introduces more granular delegation options to encourage wider participation in governance, where stakeholders can The areas of greatest knowledge or interest contribute to decision-making.

• Adaptability and evolution:Introducing multiple origins and proposal tracks into OpenGov creates a more flexible and responsive governance system that can Adapt to different types of proposals to ensure the governance process is efficient and effective.

• Transparency and Accountability: The introduction of a technical team and the ability to rapidly process proposal whitelisting enhances the network’s ability to quickly respond to critical updates or Improved responsiveness.

• Scalability and Efficiency:OpenGov’s design allows voting on multiple referendums simultaneously, making the governance system more efficient. This scalability is critical to the dynamic core time management system in Polkadot 2.0.

Polkadot 2.0 proposes a new direction for the network, abandoning its periodic slow auction model and adopting a dynamic "pay-as-you-go" ” model to insert parachains into the Polkadot network. But at the same time,the new vision points out some of the limitations of slot auctions, as follows:

• Resource allocation rigidity: The original slot auction model allocates parachain slots for a fixed period and lacks the flexibility to adapt to different project needs or changes in network conditions.

• High barriers to entry for new projects: Requires a lot of lock-in.