Polkadot is a cross-chain ecosystem that seeks to achieve full interoperability between blockchains, supporting seamless computing and allowing data and assets to be transferred from one chain to another. In this analysis, we will look at the features of the Polkadot ecosystem and try to determine what the future holds for this project in the long term.
What is being done to develop the system
There is an ecosystem fund called Polkadot, which is managed by Polychain and uses an equity-for-cash model. The exact amounts at the disposal of the fund are not disclosed, but rumors say they are very large.
Companies building or deploying parachains (third-party blockchains connected to Polkadot’s unified network) are increasing platform adoption, gaining in turn benefit in the form of investments.
For developers and creators of original ideas (both independently and in teams), grants from the Web3 Foundation are provided. Thus, assistance has been provided to more than a hundred projects.
Why projects are comfortable working with Polkadot
Polkadot makes it easy to develop platform components with Parachain Development Kits (PDK), a tool for developers. These are, in particular, Substrate and Cumulus.
- Substrate includes the basic building blocks for building blockchains: the network layer, the consensus mechanism, interpreters, and tools for creating an executable environment.
- Cumulus is meant to add a library that makes the blockchain fully compatible with Polkadot. In principle, the parachain does not even have to be a blockchain, the main thing is to satisfy the requirements of the Polkadot network.
The same tools and much the same principles can be applied to building a custom parathead chain.
It is important to note that the backhaul chain does not natively support smart contracts. However, Substrate-based parachains work with the Wasm interpreter, which means that you can code a smart contract in any language that compiles to Wasm, for example, Rust, C / C ++, Go, etc.
Partners and community
Since its inception, Polkadot has focused on building an active community. One way to engage stakeholders is through the annual Polkadot Ambassador program, which effectively communicates project awareness to potential users and developers.
Polkadot has announced a partnership with Chainlink, with the network serving as the primary oracle provider for all Substrate-based chains.
The Web3 Foundation is also partnering with London-based developers at Interlay to create a BTC parachain that will enable users to deposit BTC and mint PolkaBTC at a 1: 1 ratio using the open source XCLAIM platform.
Teams from the National Research Institute for Informatics and Applied Mathematics of France and ETH Zürich (a leading European university of applied sciences and engineering) are also involved as research partners.
Polkadot proponents mention that software engineers are also using Moonbeam, a Boston-based startup that has built its own parachain to mimic a toolkit that will be familiar and understandable to those accustomed to developing on Ethereum.
Van Schreven of the investment company KR1 counted a total of more than 250 projects being developed within the platform.
Is Polkadot the Ethereum killer?
Such a term is not overly approved by people related to Polkadot. They emphasize that the project does not want to be a competitor to the ether, but wants to become a useful addition to the global ecosystem.
Van Schreven adds that they are completely on the Ethereum side, and Polkadot is a natural evolution in the blockchain world. There should be a very promising opportunity for investors to help new blockchains popularize them.
However, Van Schreven believes that, with a clean slate, Polkadot will be able to innovate options for scalability and manageability, avoiding some of the bottlenecks that are present in Ethereum that cause users to experience slow and expensive transactions. …
Benefits for users
It’s not just developers who benefit from interacting with Polkadot. Investors can look forward to substantial staking profits over the long term. Every year the number of DOT tokens in circulation increases by 10%. At the same time, the lion’s share of new DOTs falls on stakeholders.
In the Polkadot network, stakeholders can perform different functions and be both candidates and reviewers. Before a participant can take on any of these roles, they must commit a certain amount of DOT in a smart contract for at least 28 days.
Development prospects
Polkadot is a significant advancement in blockchain technology and blockchain engineering. In a world of competing cross-chain protocols and poorly scalable networks, Polkadot is like a breath of fresh air to create a more decentralized and improved application ecosystem that is compatible with existing technologies.
A combination of the following factors:
- active community;
- great excitement around the project;
- the growing number of connected projects in the ecosystem;
- participation of major developers
– can give an impulse for the growth of value, as it was with Ethereum.
However, it remains to be seen whether the platform has enough strength to go all the way. If you look strictly from an investment point of view, then this may be a temporary trend, as it was with NEO, and then a new and more interesting project will appear. It should be noted, however, that Polkadot has been holding out for a long time and has confidently established itself among the most capitalized currencies.
Some analysts believe that investing in projects running in the Polkadot ecosystem will bring even better returns than Polkadot itself. But with higher rewards comes higher risk.
