Tldr; Polkadot is a blockchain network 👉 allows blockchains to communicate & pool security while still letting them run their own functions. Polkadot itself is designed to provide no inherent application functionality at all.
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Blockchains can get security from day one when they connect to Polkadot = individual chains can leverage collective security without having to start from scratch to gain traction and trust.
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i) Parachains (in Cosmos: Zones),
ii) Relay chain (in Cosmos: Hub) and
iii) Bridges (in Cosmos: peg-zones).
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Independent chains that are connected & secured by the Relay chain. Polkadot places no constraints over what parachains are able to do (incl. having their own token) besides that they must generate a proof that can be validated by the validators (Relay chain).
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Bridges are special parachains that allow communication to independent blockchains that are NOT secured by Polkadot's relay chain → instead use their own security and consensus (eg. Bitcoin). Bridges are still in a concept-phase.
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i) Validators,
ii) Nominators,
iii) Collators, and
iv) Fishermen
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Validators are staked full nodes that are responsible for securing & validating blocks to the Relay chain.
Validators receive potential blocks from collators in each parachain → if valid → include block headers in the relay chain.
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Nominators select & stake validators. When the chosen validator is rewarded or punished, the nominator receives a corresponding reward or punishment.
Since validator slots will be limited, most of those who wish to stake their DOTs will be nominators.
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Parachains are maintained by collators. They maintain a full-node of the parachain and collect transactions in a parachain.
Collators propose valid blocks from parachains to validators on the Relay chain (to be included in the shared state of Polkadot).
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Are the final security frontier. They monitor the activity across the protocol to determine whether any of the other participants have acted in breach of the rules. Fishermen are rewarded upon demonstrating proof that a particular breach has occurred.
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DOTs are used for staking & fees.
Fees are calculated based on four parameters:
1. Base fee (fixed)
2. Weight fee (based on usage of network)
3. tip (optional --> for higher priority)
4. Per-byte fee (storage fee based on size in bytes)
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Parachains have their own accounts on the Relay Chain (issues transactions on the parachain's behalf).
Transaction fees are rewarded to validators and nominators who delegate to validators.
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Inflation of DOTs is 10% in the first year. Depending on the staking participation, the distribution of the inflation will go to:
i) validators, or
ii) the treasury
This will change dynamically to provide incentives to participate in staking.
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DOT tokenholders have complete control over the protocol. Polkadot’s governance includes a “Council” that consist of max 24 members.
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Anyone can propose a referendum by depositing a minimum amount of DOTs for a certain period. No matter whether the proposal is proposed by the public or council, it will have to go through a referendum (voting).
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Every 30 days, a new referendum comes up for a vote (separate queues for council and public proposals). Votes are weighed based on amount staked + time locked (between 2-12 weeks).
→ minor tokenholders can influence by locking up DOTs for a longer time.
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ICYMI → In Oct 2019 the @web3foundation and @polychaincap joined forces to launch the Polkadot Ecosystem Fund👏🏾📈
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