Nova Research Institute|Polkadot ecological panorama and public chain dispute, comparing ETH2.0 and Cosmos

01

Polkadot ecology at a glance

 
Polkadot’s starting point is to believe that the future of blockchain is a world where multiple chains coexist. For this reason, it has built a high-performance cross-chain technology and relied on the relay chain to become a collection of links to many chains, including many parallel chains in the Polkadot network. The ecology of the chain and the connection of traditional public chains such as Bitcoin and Ethereum through the transfer bridge.
 
For a more detailed introduction to Polkadot, please refer to the Polkadot series of articles "Consensus Research | Detailed Polkadot: The Forerunner of Internet Enlightenment Web3.0" in the Consensus Lab .
 
Diversified project ecology
 

In the Polkadot ecology, because of the versatility and security of the relay chain as the underlying support, the parachain can have its own application logic. Various parallel chains with unique functions are an important part of the Polkadot ecology. From the underlying infrastructure to diverse applications to wallets, Polkadot's internal ecology has basically taken shape.

 

 

At the same time, due to the existence of the Substrate development system, it has become easier to build projects on Polkadot. Developers use the plug-and-play modular function of the Substrate development system, which greatly reduces technical barriers and repetitive labor, and improves development efficiency.
 

Currently, more than 70 blockchains are being developed based on Substrate, and 60 of them have launched testnets. Five are on the mainnet and have their own validators and tokens. In addition, 40 projects also expressed participation in parachains, including functional projects (ChainLink, ChainX, etc.), wallet projects (Polkawallet, Enzyme, etc.), infrastructure projects, tool projects, and technology implementation projects.

 

02

Polkadot Ecological Function Project

 
Cross-chain hub ChainX
 
As a general public chain project in the cross-chain field of assets, ChainX is the first chain in the Polkadot ecosystem to develop and implement the mainnet line based on Substrate, and it is also the largest layer 2 network of Bitcoin.
 

ChainX is positioned to integrate and transform inter-chain assets through a decentralized approach. As long as any chain is connected to ChainX, it can interoperate with all chains. It is simply a cross-chain gateway for digital assets. , Through the construction of Bitcoin, Ethereum, and EOS transfer bridges to provide cross-chain assets for digital currencies.

 

 

 

ChainX will become a secondary relay chain of Polkadot, connecting with external blockchains. At the technical level, both ChainX and Polkadot are based on the Substrate technical framework and adopt the PoS consensus algorithm; from the ecological level, Polkadot is committed to achieving any message cross-chain, and this subcategory of digital asset cross-chain will be mainly implemented by ChainX.
All cross-chain assets on the ChainX mainnet can cross-chain to the Polkadot network in the future, circulate in the Polkadot ecology, and become the cross-chain hub of Polkadot ecological assets.
 
Smart contract platform Edgeware
 
Edgeware is a high-performance, self-upgradable WASM smart contract platform in the Polkadot ecosystem. It is Polkadot's first smart contract chain.
 

Similar to ChainX, Edgeware is also a project built on the Substrate platform: ChainX can provide cross-chain functions for Polkadot, and Edgeware can provide smart contract functions for Polkadot.

 

 

 

Data structure of Edgeware stack
 
Edgeware features are divided into high performance and self-upgradable. In terms of high performance, Edgeware smart contracts are written in Rust and executed in WASM to achieve an order of magnitude development acceleration. In terms of self-upgrading, Edgeware itself pays more attention to on-chain governance. Participants can vote, delegate and fund each other to upgrade the network. Edgeware hopes that project parties can easily establish DAO governance agreements to assist and improve the governance issues of the blockchain itself.
 
Experimental network Kusama
 
Kusama is an early and highly experimental network version of Polkadot. It uses the same underlying technology as Polkadot to eliminate possible problems before Polkadot goes online to ensure the smooth operation of the mainnet. In the future, Kusama will join Ethereum and Bitcoin as the first bridge chains to connect Polkadot.
 
The Kusama network will exist as a testing ground for Polkadot for a long time. Developers can build parachains on Kusama and test Polkadot's governance, staking, and nomination verification functions in a real environment, and experiment with early high-risk functions and plans to deploy on Polkadot. The project has become the guarantee for Polkadot's long-term operation.
 
A good development path is to first develop on the Westend testnet, then run in the real economic environment of Kusama, and finally deploy on Polkadot.
 
Open cross-chain financial platform Acala
 
Acala is an open finance DeFi project. It is building a multi-asset mortgage cross-chain stable currency platform, including stable currency aUSD and Staking derivatives L-DOTs, and has a decentralized exchange. Since Acala prioritizes oracle transactions, it is more difficult to attack.
 

Acala products mainly focus on two aspects. The first product is a decentralized cross-chain multi-collateralized asset stable currency platform based on the Honzon protocol, which builds an open financial service infrastructure. The second product is to certify mortgage assets based on the Homa protocol to liberate asset liquidity, lay the foundation for the futures market for assets, and also have cross-chain capabilities.

 

 

 

Data oracle machine ChainLink
 

Oracles oracles are hailed as an important technology to realize the value of the blockchain. As a well-known oracle project, Chainlink will provide the Polkadot network with the ability to connect to real-world data. The Chainlink network connects the smart contracts of the blockchain with data in the real world by providing reliable and tamper-proof data input and output for all smart contracts on the blockchain.

 

 

 

It is worth mentioning that Chainlink has been increasing in market value since its issuance in 2017, and currently ranks 11th among all digital currencies. Polkadot's cooperation with Chainlink will also further enhance the value of the network.
 

03

External ecological comparison

 
Polkadot and Ethereum
 
Gavin Wood is the co-founder and former CTO of Ethereum. He has completed the Yellow Paper of Ethereum, which lists the technical specifications and roadmap of Ethereum. But he realized the limitations of Ethereum and left in 2016, with a new idea to create Polkadot. The difference between Polkadot and Ethereum is mainly manifested at the development level and governance level.
 
At the development level   , developers on Polkadot can write their own blockchain from scratch and design application logic freely, but on Ethereum, the execution efficiency of smart contracts will be greatly restricted due to the execution environment.
 
The 2.0 upgrade of Ethereum is still a homogeneous sharding scenario. Although there may be some differences in governance, these shards are technically the same, and the developability is limited, which cannot meet the flexibility and customization required by the built application. Sexual requirements.
 
Ethereum is an open source smart contract platform. Polkadot's core is a relay chain, and there is no smart contract. Polkadot is designed as a scalable blockchain development, deployment and interactive testing platform. The Substrate development platform in the Polkadot ecosystem is a highly free technical framework that can be customized and highly available, making development faster and more flexible.
 
Governance level   Governance level is also an important difference between Ethereum and Polkadot. Ethereum's off-chain governance model faces problems such as low efficiency and the loss of core developers. It is also restricted by developers, miners, nodes, and token holders, and takes a long time. The advantage is that it has more time for review and research, which improves security.
 
In addition, the governance of Ethereum currently relies too much on the creator, Vitalik. The core developer of Ethereum, Lane Rettig, once stated that “Ethereum governance has failed, and we are actually ruled by technical experts: the core developers have the final decision on protocol updates.” . Although the 2.0 upgrade of Ethereum's shift to the PoS mechanism will carry forward the "multi-factor consensus" governance method advocated by Vitalik, the governance process may be longer.
 
Polkadot believes that the implementation of on-chain governance will solve the problems derived from off-chain governance, such as lack of supervision and opaque decision-making processes. The core of Polkadot governance is equity-weighted voting. Participants in governance include DOT holders and the council. The community conducts a transparent and traceable mortgage voting in the referendum, and resolves low community activity through adaptive group deviation and rotation problem.
 
Polkadot considers the development of a separate ecology in terms of governance, and also gives a complete on-chain governance model. Through faster upgrade and automatic execution, it provides a better way for the ecology to be efficient, democratic, and maximize the benefits of all participants. Complete solution.
 
In general,   the advantage of Ethereum is that it has the most powerful developer community, as well as a huge industry first-mover advantage and consensus. Polkadot has not yet been launched, and there is a clear gap with the existing ecological space of Ethereum, but the Polkadot ecosystem is already in the process of steady development.
 
Ethereum Solidity has become a popular language for blockchain entry, with a huge ecosystem. Polkadot's operating language and development platform, Substrate, provides more flexibility and freedom of development. More and more new projects are choosing to develop in Substrate. The energy invested by the Polkadot team can see its ambition to develop and promote the Substrate platform.
 
At present, Polkadot has basically covered all the functions of Ethereum 2.0. In this case, Ethereum's disadvantages are obvious: performance has serious bottlenecks, the final version of "Serenity Serenity" is nowhere in sight, and future hard fork upgrades still exist. Many uncertainties.
 
Polkadot 与 Cosmos
 
Both are cross-chain star projects. The characteristics of Polkadot and Cosmos are different in three aspects: system architecture, security, and governance .
 
Architecture and design goals   Polkadot and Cosmos differ in the architecture and design goals of the cross-chain communication protocol. Polkadot's goal is to pass arbitrary messages between parachains, such as smart contracts or complete any other type of communication, so the structure is more complicated. While Cosmos focuses on asset transfer between blockchains, the protocol is simpler.
 

Polkadot uses a shared security mechanism to ensure the security of cross-chain communication. All parachains have the same security level. Therefore, information can be trusted between chains to ensure data availability. At the same time, the existence and incentive of the phisher fishman can monitor the malicious activities of the parachain and submit the relay chain to roll back the whole network, which is a further guarantee for safety.

 

 

For Cosmos, each chain zone in the network has its own independent validator, and the security is not affected by other chains. There will be chains that collude with validators to do evil. The way Cosmos works is to connect a zone to a trusted communication center chain Hub, and the Hub verifies that the verifier of another zone is trustworthy before transmitting information.

 

 

 

cosmos network architecture
 
Cosmos has low cost of network evil and its overall security is not as good as Polkadot, but at the same time, because of the independence between chains, it avoids one chain from corroding other chains. Polkadot's network does not allow evil, and the cost and difficulty of parachains are high. Once evil is done, it will affect the overall system security and trigger a network rollback.
 
Algorithms and Security   Polkadot and Cosmos operate in two different security modes. Polkadot's parachain has global shared security, while each chain of Cosmos is independently self-protected.
 
The consensus algorithm of Polkadot's relay chain is GRANDPA consensus, which can quickly finalize blocks on the parachain. Parachain controls its own state machine and local rules, and transfers part of its security to the relay chain to obtain the security sharing of the entire system. The significance of shared security is that developers can also focus more on developing their own business without spending time and cost to find and maintain validator nodes.
 
Cosmos adopts the Tendermint consensus algorithm. Each blockchain zone is independent and self-protected. Each chain runs its own consensus mechanism and needs to maintain network security. The verifier of each chain is only responsible for guaranteeing the chain’s Safety.
 
Compared with Polkadot, since the verifier of the relay chain has the final decision on the status change of the parachain, although the setting of the phisher can reduce the malicious activities of the verifier, it cannot be completely in Polkadot for applications that require more control. Controls its own chain, and Cosmos zone can take full control of its own chain. For example, Binance Chain cannot give up control of the transaction block, so Binance Dex chose to develop based on Cosmos.
 
Access and governance methods   Polkadot and Cosmos are different in governance and membership. Cosmos is similar to Android, and Polkadot is similar to Apple.
 
Cosmos does not have shareholder membership rules, and the access threshold is low. As long as the IBC standard is used, the hub can be downloaded. The Hub itself has sovereignty. The purpose of building is to link other blockchain zones, and each zone is at its own risk.
 
In terms of governance, it is different from Polkadot's DOT held by voters for weighted voting. Due to the independence of the chain, Cosmos does not have a central rule applicable to the entire blockchain network. The Hub chain and each zone chain have their own Governance process.
 
Polkadot has a higher access threshold due to the limited number of parachains. Polkadot will allocate slots for relay chains and parachains through an auction mechanism, which will be obtained by the highest bidder by locking up Dot. Once the parachain is connected to the Polkadot network, it has shared security.
 

04

Summary outlook

 
Public chain ecology
 
The complete public chain ecology includes: a sound underlying structure, an active developer community, a diverse project community, and a flexible and easy-to-use infrastructure.
 
Comprehensively evaluate the functionality and security of each mainstream blockchain platform. The blockchain development platform preferred by most developers is still ETH, Cosmos and Polkdot: Ethereum has a strong developer community and Cosmos runs more independently. , Polkadot has stronger operability and security, and developers will choose among them according to the needs of their respective applications.
 
At present, the ecology of Ethereum is the largest among the three, but with many bottlenecks and limitations, it is foreseeable that the subsequent ecological development and resource allocation of the blockchain industry will tilt towards the latter two.
 
However, based on the current stock system and development prospects of the blockchain industry, Ethereum, Cosmos, and Polkadot are more like a complementary relationship than a competitive relationship. Through the public remarks on Polkadot’s design structure and the team, it can be found that Polkadot has no intention of deepening competition between public chains. The pattern and goals are not limited to the stock game in the blockchain world, but to achieve greater Web3.0 Vision and exploration.
 
Industry outlook 
 

Although block chain technology has been proposed for many years, and public chain infrastructure investment has accounted for a large proportion of venture capital in the past, block chain has not yet moved towards large-scale application. According to data from Dappreview, there are currently more than 4,000 dApps in the blockchain industry, with only 130,000 active users, and the number of users is still too small compared to Web2.0.

 

 

 

Data source Dappreview
 
Metcalfe's Law (Metcalfe's Law) means: proportional to the square value of the network and the network node \ users. This relationship is based on the so-called "network effect", that is, the more users the network participates in, the greater the network value.
 
The participation of large-scale users will only appear when a batch of practical dApps that can solve user needs and have a good user experience appear in Blockchain 3.0. The foundation of all this is to solve the bottleneck of the existing blockchain network expansion and the lack of infrastructure, as well as the problem of the division of industry resources by public chain islands.
 
Ethereum, Cosmos and Polkadot and other projects that integrate the advancement of blockchain technology provide new use cases and solutions for industry infrastructure construction: on the one hand, expansion and scalability have improved the underlying infrastructure of the blockchain world; On the one hand, by providing cross-chain functions for assets and information, it provides a hub for inter-chain interaction, and further breaks the island state between public chains. The development of blockchain 3.0 infrastructure represented by projects such as Polkadot will have an important impact on the entire public chain and cross-chain ecology, and will help promote the explosion of blockchain network effects.

 

Home    行业研报    Nova Research Institute|Polkadot ecological panorama and public chain dispute, comparing ETH2.0 and Cosmos