What is Polkadot (DOT)?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 7 min
In short
Polkadot is a network designed to run many independent blockchains under one shared security guarantee. It launched in 2020 and its design was led by Ethereum co-founder Gavin Wood. A central relay chain handles validation while individual chains, called parachains, run in parallel on top of it.
Key points
- Individual chains share validation from one common validator set
- A standard message format (XCM) moves data and assets between chains
- Chains are built with the Substrate framework
- Access to the network moved from slot auctions to buying blockspace by the period
Definition
A network in which a relay chain performs validation centrally and shares that security with many individual chains, forming an interconnected set of blockchains.
Polkadot set out to solve two problems. First, every new blockchain has to recruit validators from scratch, leaving small chains weakly defended. Second, chains cannot exchange data with each other in a trustworthy way. It answers the first with shared security and the second with XCM, a common message format.
At the centre sits the relay chain. It runs no smart contracts of its own; it verifies the blocks submitted by each parachain. Validation is performed by validators chosen through Nominated Proof of Stake, where DOT holders nominate the validators they back, and misbehaviour is punished by slashing.
Parachains are built with Substrate and can choose their own fee token, block time and governance rules. Originally, connection slots were won at auction for leases of up to two years, funded by crowdloans in which users lent their DOT. That has since moved to buying block production capacity for the period you need — agile coretime — which changes the cost structure of joining.
DOT pays fees, is staked, votes in governance and buys coretime. Governance runs entirely on-chain, and protocol upgrades can be enacted without a hard fork.
Watch out for
- · Unstaking has a waiting period, and stake can be slashed if the validator you nominated misbehaves
- · Each parachain differs, so wallet and exchange support has to be checked case by case
- · Core mechanisms such as how chains connect have changed, so older explanations may no longer match reality
Frequently asked questions
What is Kusama?
A network running nearly the same code as Polkadot, used to trial features first. It handles real assets but ships changes faster and is treated as experimental.