Build A Cross-Chain Network Protocol Like Polkadot For Your DeFi Convenience
The crypto market was in a furious stage. Still, with the emergence of DeFi (Decentralized Finance), which worked as a catalyst for the bull market, it has shown some astonishing and fabulous revolutions. A new range of financial business is being undertaken with the existence of DeFi, starting from stablecoins, lending, trading, financial derivatives to insurance protocols; every financial solution and service is being offered under one roof. In early 2020, the total market value of all the DeFi projects in the market was estimated at US $ 700 million. And this exponential growth has already crossed $18 billion.
The traditional financial system is doubtful for the acceptance of blockchain technology, as it is either expensive, slow, or too centralized. A new protocol has hit the market to build DeFi protocols, which negates all the problems mentioned above- called Polkadot network and its sister test network called Kusama. Polkadot, founded by Gavin Wood, who is also the co-founder of Ethereum, has built it.
What Is Polkadot?
Polkadot is a heterogeneous multi-chain interchange and translation architecture, enabling customized side-chains to connect with public blockchains. It aims to solve the problem of high gas fees. It is a shraded multi-chain network that enables multiple transactions on several chains in parallel, eradicating any kind of problems that occurred on the legend networks before.
The Polkadot ecosystem includes a range of applications that enables all existing layer one solutions and applications to relay with each other.
Characteristic Of Polkadot:
Heterogeneous shrading model
Polkadot is more than a blockchain network. Because, It is a network that connects other blockchain networks together. The other network can be a private blockchain, public blockchain, oracles, smart contracts, etc.- thus a heterogeneous shrading model.
Scalable shraded multi-chain network
As it is a shraded multi-chain network, multiple transactions carried out swiftly on several other chains in parallel, thus improving scalability.
Interoperability
Polkadot has achieved interoperability in two of the following ways;
- Interoperability has been achieved internally between parachains and parathreads.
- Interoperability has been achieved externally through special parachains called bridges that connect one independent blockchain to another.
Shared security
All the projects developed on Polkadot are pooling resources, so you do not have to pay for security. Other ways to get security, to bootstrap their own security with their validators, nominators, etc.
On-chain governance
Polkadot is the first and only blockchain that has a governance process built on the ecosystem. DOT token holders can vote on different proposals on the ecosystem.
Forkless Upgrade
The Polkadot ecosystem updated with the change in any fork. It works on the meta-protocol level based on the result of governance actions.
Multi-signature offers extra security
One of the most important attributes of Polkadot is the public and private key security on multiple levels.
What is DOT?
DOT is the native token of the Polkadot ecosystem for carrying out different activities. The three main function that DOT computes are-
- Offering governance
- Running the network
- Creating parachains by bonding DOT.
Rights of DOT holders;
- To act as a validator, collator, or nominator.
- They can also participate in the governance of ecosystems.
- Additionally, they can participate in the decision making of the ecosystem
- besides, they can bid and become a collator for a part thread.
Bottom line:
To Conclude, a huge number of DeFi projects in different arenas of finances are developing on the Polkadot ecosystem. It is garb various benefits from the cross-chain network protocol. The invention of Polkadot in the environment of finance is attracting a huge crowd.