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Polkadot (DOT)

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What is Polkadot (DOT)?

Polkadot is a blockchain protocol, created by Gavin Wood (Ethereum co-founder), to help connect and give interoperability to other blockchains. It was built and designed to work as the internet of the blockchains, connecting individual chains to make them compatible and capable of exchanging data, for example: connecting Ethereum with Bitcoin, with Cardano, with Solana. DOT is a utility token native to Polkadot that serves three purposes: governance, safety and connectivity. That is, users can use DOT to vote on further improvements of the protocol, to do staking and help validate transactions, and to bind other blockchains to Polkadot.

 

What makes it unique?

  • Polkadot is the first of its kind: a layer-0 solution. Instead of competing with other chains, it is aiming to work one layer below and connect all of them just like the internet connects different computers across the globe;

  • Polkadot works as a hub that gathers and distributes data from a chain to another. It uses a technology of parachains to bring data to its mainnet, the Relay Chain, that is secured by a proof-of-stake (PoS) consensus algorithm, and then sending data to other chains. This adds a new layer of security to the transactions;

  • Polkadot has a system of treasury that is fed with part of the transaction fees. Members of the community can request access to part of this reserve to develop improvements to the protocol. This treasury makes Polkadot self-sustainable and self-sovereign.

 

Finality

In crypto, we have ecosystems that exist inside individual blockchains, like the dApps and projects that run on top of Ethereum. But the truth is that there is no crypto ecosystem as a whole. Layer-1 solutions, how main blockchains and cryptocurrencies are called, lack interoperability with one another. They suffer from the same problem as computers before the advent of the internet: they have rich data, usability and strengths, but are isolated and can be bound with other chains to gather forces. Polkadot aims to solve this by working as a net that connects all Layer-1s solutions. It is an infrastructural project that,by connecting different blockchains, can help build a real ecosystem, while adding scalability, reducing transaction costs, and freeing blockchains to get specialized and niched. Polkadot is cooperating to the surge of the news internet generation, what has been called Web 3.0 (or, simply, web3).

 

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