Is Polkadot on the decline or has it fulfilled its original intention?

Web3 is another evolution of the current Internet, and it has also brought many changes and influences. As an important role in Web3, Polkadot's technological updates and important processes are often closely related to the development of the Web3 industry.

In the white paper released in 2016, Gavin Wood, the chief co-founder of Polkadot, listed the five major defects of the blockchain at the time, as follows:

1. Scalability

2. Isolation

3. Development

4. Governance

5. Applicability

As explained in the white paper: His goal is to build a decentralized network framework to overcome these defects.

In the public token sale (ICO) in late 2017, Gavin Wood described the Polkadot project as follows:

"This is an underlying architecture built on trustlessness that supports economic activities between people, businesses and organizations. It will subvert the bureaucracy, trade and industry in the same way that Google, Facebook and Wikipedia have revolutionized the way telephones, libraries and postal systems work."

Our topic today is, is Polkadot dying, or is it fulfilling its original intention? This article will explore this.

Polkadot Background Story

Even before the Polkadot mainnet was launched in May 2020, the project had already attracted widespread attention. Initially, the network was envisioned to support the expansion of Ethereum and help it achieve more application scenarios. In particular, Polkadot is designed to let companies and other enterprise users build their own custom blockchains that share resources with Ethereum through a cross-chain protocol.

Indeed, Polkadot’s core protocol was supposed to be an extension of Ethereum, and Polkadot was designed and developed by Ethcore, the same company that built Ethereum.

This also explains why several of Polkadot’s main co-founders were almost all involved in the creation of Ethereum, especially Dr. Gavin Wood, who proposed and helped develop Solidity, the programming language that Ethereum and most of its applications rely on. Other co-founders Robert Habermeier and Peter Czaban also worked as Ethereum core developers at Ethcore.

Afterwards, Ethcore was renamed Parity Technologies. At the same time, the idea of ​​Ethereum as a special blockchain in the ecosystem was abandoned, and it was chosen to be one of many public and private chains that can be connected to the Polkadot network to build a super network that will eventually become the backbone of the Internet.

Nevertheless, Polkadot still retains the goal of becoming a basic framework for new blockchains, and anyone who wants to build a customized blockchain for their specific needs can easily do so. This means that Polkadot provides a ready-made network, consensus mechanism, and template.

With Polkadot, developers do not need to spend a lot of time and resources to build a blockchain platform from scratch. They can directly download the Substrate node template, which is a tiny code base that serves as the skeleton of the blockchain for building and customizing.

In this way, developers can focus on building decentralized applications (DApps) to provide unique services or user experiences.

In addition, this framework, called Substrate, also provides a mechanism for sharing data and processing inter-chain transactions through a special cross-chain protocol, which is applicable to almost all public and private chains.

So what is Kusama? And how does it relate to Polkadot?

Kusama is an experimental development environment where development teams typically test and innovate their applications before deploying them on Polkadot.

Ultimately, the Polkadot network will play a key role in driving human society's transition to Web3, a more decentralized Internet that gives end users more control over their data.

In 2017, Gavin Wood, Peter Czaban, and Ashley Tyson co-founded the Web3 Foundation to incentivize and support the development of protocols, applications, and technologies for the decentralized Internet.

Polkado ICO

The Polkadot project has generated a great deal of enthusiasm in the Crypto community, which has translated into huge financial support.

In October 2017, the project raised $80 million through its first private token sale and an additional $65 million in a public sale during the same period. In two subsequent rounds of private sales, Polkadot received more than $100 million in financial support. In total, Polkadot has successfully raised more than $250 million from investors.

When the mainnet was officially launched in May 2020, many investors, developers, and technology enthusiasts saw it as the project that would bring blockchain into the mainstream.

In the first year after the mainnet was launched, Polkadot's native token DOT became the fourth largest Crypto asset with a market value of nearly $20 billion.

Did Polkadot achieve its goals?

To assess whether Polkadot is on its way to success, we need to examine six key areas. Five of these areas are based on the shortcomings of first-generation blockchains listed by the Polkadot team in the original white paper. The sixth area is the market performance of the DOT token as a trading asset. Although this was not one of the goals set by the Polkadot team, it is still important because most people do measure the success of a blockchain by the market performance of its native token.

Market Performance of DOT

DOT is the native token of the Polkadot network. It has the same status in the Polkadot network as ETH in the Ethereum network. DOT tokens are used to pay transaction fees, support the consensus mechanism through staking, and are used as voting rights in the governance structure.

For many people, especially traders, the value of DOT is the main criterion for judging the success of the Polkadot network. While its performance can be used as an indicator of project performance, it should not be viewed in isolation. Many excellent projects have assets that tend to underperform in the market at certain times. At the same time, there are also some assets that do not have any real innovation but are over-hyped in the market.

For the most part, DOT, like most assets on the Crypto market, has a positive correlation with BTC. Generally speaking, the price will fluctuate up and down with the price of BTC and other Crypto assets.

But there have been some notable independent trends over the years. For example, DOT once fell from the top ten to the top twenty on the CoinMarketCap list. However, this can be explained by the emergence of many new assets on the market, rather than because DOT has performed poorly compared to other assets.

Therefore, in terms of the market performance of DOT alone, considering the overall market environment, it can be said that Polkadot has been stable in maintaining its value.

Scalability

"How much processing, bandwidth, and storage resources are consumed to process a single transaction worldwide? What is the volume of transactions that the system can reasonably handle under peak conditions?" - Excerpt from the Polkadot white paper.

Since the birth of Polkadot, one of its core selling points has been scalability.

At the beginning of the project's conception, scalability was considered the main obstacle to the widespread application of blockchain technology. At that time, BTC's memory pool was frequently blocked, resulting in confirmation delays and soaring transaction fees. The same situation also happened to the Ethereum network, especially after more and more decentralized applications (DApps) were launched.

The Polkadot development team realized that the key problem that hinders the expansion of blockchains is that transactions in the global state must be verified in a synchronous manner, and this linear arrangement greatly limits scalability.

The design of the Polkadot protocol cleverly separates transaction verification from the organization of transactions on the shared ledger.

Unlike traditional methods, Polkadot's transactions do not need to be forced into a single queue, but can be confirmed independently. This mechanism is achieved through multiple blockchains (called parachains), which interoperate and share security through a central main chain called the relay chain while maintaining their own consensus mechanisms.

This design enables the Polkadot global network to confirm hundreds of thousands of transactions per second, showing great expansion potential.

Although this technology is excellent, the scalability issues of most blockchains have been gradually alleviated today. Polkadot's leading advantage in scalability has gradually been weakened, especially as other mainstream blockchain projects have introduced similar expansion solutions. For example, Avalanche introduced a subnet architecture, Ethereum launched a restaking mechanism, and Cardano adopted a partner chain.

Some people believe that the Polkadot team’s excessive focus on scalability has slowed the project’s progress in other areas of innovation, affecting its competitiveness.

However, recently Polkadot’s core developers have made three major updates to the network, aimed at pushing the Polkadot network towards the so-called “Polkadot 2.0”.

The first is Asynchronous Backing, which quadrupled the block size and reduced transaction confirmation time from 12 seconds to 6 seconds.

The second update is Agile Coretime, which makes the allocation and management of resources on the network (especially block space) more flexible.

The third update is Elastic Scaling, which allows parachains to dynamically scale by allocating multiple cores. In other words, a single parachain can process multiple of its own blocks within a global block of the Polkadot network, thereby increasing transaction processing.

There is no doubt that these updates have greatly improved the overall transaction throughput of the Polkadot network.

Isolation

"Can the different needs of multiple participants and applications be met in a near-optimal way under the same framework?" - Excerpt from the Polkadot white paper.

The second problem that Polkadot wants to solve is the current situation of isolation between blockchains.

The development team has created a mechanism for interoperability between public and private chains. The native blockchains (parachains) on the platform are connected to each other through relay chains, enabling the sharing of data and assets.

As of 2024, more than 50 parachains have been launched on the Polkadot Substrate platform. These chains can share data and digital assets through the Cross-Consensus Message (XCM) protocol and the shared protection runtime execution SPREE protocol.

For blockchains not built on the Polkadot network, they can be connected to the Polkadot network through various bridging protocols.

For example, Ethereum is connected to the Polkadot ecosystem through the Snowbridge protocol. The BTC network is connected through the XClaim protocol, and users can lock BTC on the BTC chain and mint it as iBTC on the Polkadot network. Reverse transactions are also supported.

In terms of blockchain interoperability, the Polkadot network seems to have one of the best solutions widely implemented on the market.

Developability

"How effective are these tools? Do the APIs meet the needs of developers? Are there relevant educational materials? Are there appropriate integrations?" - Excerpted from the Polkadot white paper.

Polkadot is designed to host a variety of applications, just like other similar networks such as Ethereum.

Polkadot's Substrate framework provides flexible capabilities that developers can use to easily build customized blockchain applications. Developers can launch unique parallel chains through assigned ports and cores.

Polkadot Wiki provides a wealth of resources to help developers understand the operating procedures, and the document library is constantly updated to ensure that the content is always up to date.

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Polkadot's SDK is designed to support the execution of complex processes through relatively simple logic. The Substrate platform provides the building blocks of new blockchains, without developers having to redesign complex mechanisms.

In terms of providing tools to build, implement and integrate projects, it can be said that Polkadot has been actively adapting to market needs.

The development team is currently busier than ever. A significant sign is that most of the more than 10,000 commits since the project started occurred in 2024.

In addition, according to Electric Capital data, which tracks Crypto development activity, the Polkadot ecosystem has the second highest number of monthly active developers after Ethereum. Even individual parachains, especially Kusama, Moonbeam, Moonriver and Acala, have entered the list of the top ten projects with the most monthly active developers.

Governance

The Polkadot network provides considerable control to all DOT token holders collectively, forming a governance structure called OpenGov. In essence, this project is a decentralized autonomous organization (DAO).

DOT holders can elect a governance committee, either directly or through delegation, whose responsibilities include processing change proposals to the core protocol and assigning a technical committee to coordinate protocol upgrades.

Nevertheless, any DOT holder can propose a proposal, which, if supported by other holders, can be voted on through a referendum.

The Polkadot ecosystem also features a treasury that is partially funded by network fees and penalty fees, which are allocated to different projects through direct or delegated votes of the community.

In other words, community members can apply for funds to perform tasks that benefit the project. These proposals are voted on and, if they receive enough support, receive funds from the treasury.

However, there are also some issues with the governance of the Polkadot ecosystem.

In the early stages of the Polkadot and Kusama projects, Parity Technologies invested a lot of resources in marketing and community building. But at some point, it gradually retreated to the background.

Considering that Polkadot is supposed to be a decentralized project, this move is reasonable and the community should have taken over the responsibility of promoting the application of technology. Unfortunately, this move also reduced more targeted marketing, resulting in slow adoption of the project and its applications.

Nevertheless, Polkadot still provides one of the most seamless governance structures in the Crypto ecosystem.

Applicability

Currently, there are nearly 60 active parachains on the Polkadot network.

However, it is worrying that many of the parachains that have been launched in the Polkadot ecosystem remain idle, which calls into question the future of the ecosystem.

A well-known parachain project developed based on the Polkadot Substrate framework is Bittensor, a decentralized machine learning platform. Its native token TAO ranks 24th on CoinMarketCap.

Another notable project is Astar Network, an incubator for decentralized applications and second-layer solutions that provides developers with Web3 interoperability infrastructure, economic incentives, and technical support.

Other projects based on the Polkadot platform include Enjin, OriginalTrail, Centrifuge, Moonbeam, Aleph Zero, Celer Network, Moonriver, Phala Network and Acala.

In addition, CoinMarketCap lists nearly 100 projects that are already up and running in the Polkadot ecosystem.

Conclusion

Despite some challenges, Polkadot still provides excellent solutions and has made significant contributions to promoting the popularization of blockchain technology. Polkadot is definitely not in decline.

The original text comes from medium, compiled and sorted by the Polkadot Ecological Research Institute. The English copyright belongs to the original author. Please contact the editor for Chinese reprint.

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*The information provided by the Polkadot Ecological Research Institute does not represent any investment suggestion. The articles published only represent personal opinions and are for reference only. In view of the fact that China has not yet issued relevant policies and regulations on digital assets, users in mainland China are advised to pay careful attention to the development of Crypto.