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Polkadot Exclusive, 2021 | Relay Chain

Polkadot Exclusive, 2021 | Relay Chain

What is Polkadot?

Polkadot is a next-generation blockchain protocol and enables different blockchains to be connected and communicated with one another. The project creates a vision of creating a better Internet in which control lies more with individuals than with large companies.

What problem does Polkadot solve?

Many new Blockchain Applications now fail because there are not enough users who, as miners or in a similar function, ensure the security and thus the continuity of the chain. The large number of new projects based on the technology ensures that only very limited resources are available for each of them. It makes the systems more vulnerable to attacks and takeovers. Polkadot aims to counteract this by effectively sub-leasing the resources flowing into the system to new blockchain systems. Small projects, in particular, could benefit from this approach.

 Polkadot website

The Polkadot blockchain thus only acts as a so-called ” relay chain. ” This approach should not only enable the simple, fast, and resource-saving start of your blockchain system: the interaction between the participating chains should also improve, as the shared relay chain significantly simplifies atomic transactions between the systems.

Polkadot at a glance

Cryptocurrency DOT
founder Gavin Wood, Robert Habermeier, Peter Czaban
publication October 2017
developer Parity Technologies, Chainsafe Systems, Soramitsu
Consensus algorithm NPoS (nominated proof-of-stake)
Use case Infrastructure, smart contracts, DApps
Interoperability Yes
Whitepaper PolkaDotPaper.pdf

How does Polkadot work?

polkadot system

The core of Polkadot is the so-called relay chain. The central Polkadot blockchain manages the states of the blockchains known as parachains, which connect to the system. The native tokens used on the relay chain are called dots.

Among other things, dots need to start new blockchains and couple them to the relay chain. In addition, dots requires the governance and consensus-building models of the network. Initially, most dot payout to the investors in an ICO before starting the project. In addition, dots are inflationary. In the initial phase of the network, the volume expects to grow by 10% each year. The new dots created in this way are paid to those users who actively stake their tokens and secure the network as validators (more on this in the sections taking).

Relay Chain –

The Polkadot relay chain has limited space for parachains. The aim is to gradually increase the number of newly available slots to 100 during the introductory phase of the system. In the long term, there are plans to introduce so-called nested relay chains (i.e., nested relay chains) to create a practically unlimited number of blockchains to perform based on Polkadot. The slots on the relay chain are priced and rented in an auction model. The dots offered for a slot forms bonds for the duration of the contract, i.e., firmly invested.

In contrast to staking, the dots created in this way do not earn interest. The blockchains rented in the slots allowing writing their state (i.e., state) into the relay chain. Parachains with a fixed slot have the right to write to every block of the relay chain for the rental duration.

Parachains –

In addition to the parachains, there are the so-called parathreads. Blockchains mapped in parathreads have the option of writing data to the relay chain as required. Similar to transactions in the bitcoin-Blockchain incur transaction costs depending on the current system load. It is also not guaranteed that the interaction can take place directly with the next block. Parathreads are therefore particularly suitable for smaller blockchain projects on which there is only a limited amount of activity. In principle, blockchains docked to the relay chain can also freely switch between para chain and parathread usage. Technically, the two variants are very similar to each other. The decision for or against one of the two,

 is likely to be made in most cases primarily for economic reasons.

Parathreads –

The Polkadot relay chain model thus means a clear separation of consensus building and status communication. For example, in Bitcoin, state transmission and validation can hardly distinguish from one another. The Lightning Network could, however, break this paradigm somewhat in the future. Even in the much more dynamic one Ethereum-Network, there is no separation. Unlike the Ethereum blockchain or Dogecoin blockchain, the Polkadot Relay Chain does not offer any space for your program logic. To execute smart contracts or, for example, computing operations, it is always necessary to use a separate blockchain. According to the Polkadot developers, this ensures that the system can, in principle, scale as required.


The fact that the blockchains based on Polkadot share the consensus mechanism also simplifies communication between the individual chains. Within the Polkadot system, there is no need for additional oracles attesting to the state of another blockchain. It means that larger arithmetic operations can theoretically carry out in parallel on Polkadot.

The scripts have to be executed and interlocked in several parachains and threads to do this. The results of the respective calculations can then communicate securely via the relay chain. Whether this provides an advantage over the possibilities of Ethereum and others in practice during complete Blockchain systems is not yet foreseeable at the moment.

Bridges –

In addition, it is provided via so-called Bridges the interaction with external block Chain projects to enable. Bridges represent specialized parachains that monitor external networks and, if necessary, trigger transactions there. Such bridges thus take over the task of oracles within the Polkadot system, which monitors what is happening on other blockchains. Due to the general interoperability within the Polkadot network, the performance of the bridge is automatically available to all para chain and parathread blockchains.


One of the great advantages of the Polkadot network is the ability to implement your blockchain projects quickly and at a low cost. To make it even simpler to get started, the one behind Polkadot offers Web3 Foundation with Substrate. We offer a simple, modular framework that you can use to develop your blockchains. The system based on WebAssembly makes it possible to set up a rudimentary blockchain within a few minutes. The development of real logic functions is also comparatively easy thanks to numerous programming languages ​​from C ++ to Rust. The blockchain systems developed with Substrate are directly compatible with Polkadot but can operate or test independently if required. The combination of Polkadot and substrates also promises relatively inexperienced developers the opportunity to develop their blockchain-based software in the future.

Staking with Polkadot

Polkadot uses a proof-of-stake approach to secure the relay chain against attacks. As already described above, the amount of dots is currently increasing by 10% annually (in the long term, however, the inflation rate should decrease somewhat). The largest part of the newly created dots distributes to stakeholders who invest their dots firmly. Stakeholders can play different roles in the Polkadot network. First of all, there are the nominators (“nominators”) and the validators (“validators”).

Consensus roles 

It is necessary to lock your dots in a smart contract (staking), which can payout after 28 days at the earliest. The validators are responsible for two important tasks. On the one hand, they check the contents of the blocks submitted by the parachains and threads for correctness, and on the other hand, they combine them into blocks of the relay chain and agree with the other validators on their validity. If a validator notices that it is putting faulty blocks to vote or voting positively for them, its staked dots can withdraw become. Validators have to operate a full node that runs around the clock.

Nominators save this effort but also receive less interest on your investment. All you have to do is vote on the validators. Nominators can also lose parts of their staked dots if they vote for a validator that damages the network.

In addition, the collators or mixers (“collators”) play an important role. Collators transmit the current status of a para chain or a parathread to the validators. The Polkadot network does not pay for them. Reimbursed in the form of an internal token of the blockchain, they communicate to the outside world. In addition, the collators and other nodes of the corresponding blockchain act as so-called fishermen who keep an eye on the validators and report any misconduct.

Development and governance

Another feature of the Polkadot developers’ system has repeatedly highlighted that it can easily upgrade it. In contrast to other blockchain systems, even major function updates in Polkadot do not require forking the network, as is necessary with Bitcoin, Ethereum, and many other systems. Instead, Polkadot has sophisticated governance mechanisms. Whether active or passive, stakeholders have the option of advice(“council”), which initiates referenda on code and rule changes. Non-council members also have the opportunity to introduce such referenda. Every 28 days, it is deciding whether it will hold a referendum. To vote, stakeholders have to bind DOTs via smart contracts. Normally only one referendum can hold at a time. An exception to this is so-called emergency referendums, which a special technical committee can initiate together with the council. Emergency referendums are intentional for situations in which serious security gaps in the system need to fix as soon as possible.

It is unclear whether this voting system is better than forking client applications. The solution is more elegant. The developers of Polkadot argue that unsightly chain splits can avoid in this way. Given that Polkadot should act as a meta-blockchain for as many other projects as possible in the long term, this is certainly a worthwhile goal.

Polkadot potential and opportunities

The developers at Polkadot have identified a clear problem in the blockchain and crypto world and are offering a smart solution with their system. Should Polkadot prevail, the system could enable a wave of new, innovative blockchain systems that are not only secure and can access the resources of the Polkadot validator pool, but above all, can be started at a low cost. Polkadot’s Substrate Platform is already making the initiation of small blockchain projects a lot easier.

Even very small blockchain projects with a limited lifespan and a low targeted user base could implement quickly and easily with the help of Polkadot. However, it continues to see whether such small systems represent sensible solutions in individual cases. From a technical perspective, Polkadot is extremely exciting. In principle, the system can become a go-to solution for the rapid implementation of blockchain projects. Of course, it remains to see whether it will ultimately be able to exploit this potential.

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