Polkadot (DOT)
Polkadot is a blockchain ecosystem aiming to provide users with interoperability and scalability. Its main blockchain is called the Relay Chain, and other compatible chains within the ecosystem are called parachains. These parachains function parallel to the Relay Chain and are used to scale the network by allowing for specialized, tailored solutions. The ecosystem also includes bridges that allow for interaction with other siloed blockchains.
History of Polkadot
Polkadot was founded in 2016 by Gavin Wood, Robert Habermeier, and Peter Czaban but went live in 2020. When it launched, it was run as a proof-of-authority (PoA) blockchain with six validators provided by the Web3 Foundation, which oversees the development of Polkadot. Once the network gained enough outside validator interest, it transitioned to a nominated proof-of-stake (NPoS) consensus mechanism, a variant of proof-of-stake (PoS).
Structure of the Polkadot Ecosystem
The Polkadot ecosystem is made up of the Relay Chain and parachains. The Relay Chain is the main backbone of the ecosystem, providing security for the linked parachains. Parachains are specialized, parallel blockchains that use the Relay Chain to finalize and confirm their activity. They are designed to be tailored for specific uses. Their activity is organized into blocks by collators, who then send those blocks to the Relay Chain for validation by validators. Validators are responsible for putting out new blocks on the Relay Chain and are chosen by nominators, who stake their DOT coins with validators as a vote.
The number of parachains that can be added to the ecosystem is limited by the number of available slots, which can be leased through an auction process. In addition to parachains, the ecosystem also includes parathreads, essentially bunches of parachains pooled into single slots.
The Polkadot ecosystem does not require forks for upgrades due to its technology.
DOT Coin and Market Dynamics
DOT is the native coin of the Polkadot ecosystem and is used for various functions, including governance. It was originally issued with 10 million coins, but this was later increased to 1 billion through a vote by DOT holders. As a result, DOT has an inflationary supply with no maximum limit.
The price of DOT is generally referred to as the "Polkadot price."
