Polkadot is an open-source sharded multichain protocol that connects and secures a network of specialized blockchains by enabling cross-chain transfer of any data or asset type, not just tokens, enabling blockchains to communicate with one another. Polkadot was built to serve as the foundation for a decentralized internet of blockchains, colloquially referred to as Web3.
Polkadot is referred to as a layer-0 metaprotocol since it underpins and defines a network of layer 1 blockchains known as parachains (parallel chains). Polkadot, as a metaprotocol, is also capable of updating its own codebase autonomously and forklessly via on-chain governance in accordance with the will of its token holder community.
Polkadot lays the groundwork for a decentralized web managed by its users, as well as for the rapid development of new apps, institutions, and services.
The Polkadot protocol connects public and private blockchains, permissionless networks, oracles, and future technologies, enabling these autonomous blockchains to share information and transactions in an entirely trustless manner via the Polkadot Relay Chain (explained further down).
Polkadot's native DOT coin serves three distinct purposes: operational and security staking, network governance facilitation, and bonding tokens to connect parachains.
Polkadot has four elements:
As stated above, Polkadot's design supports several chains. No single blockchain lives in isolation. Its strategy has various benefits:
Polkadot supports several blockchains via sharding or parachains. This allows for effective parallel processing.
Its interoperable design and chain compatibility allow different Polkadot parachains and applications to share information and functionality.
Each Polkadot parachain can be customized for a specific use case.
Hard forks are unnecessary for upgrading Polkadot; new features can be added without completely rebuilding the network.
Polkadot raised $140 million in 2017 through their DOT coin sale. In 2019, the company held two private sales, raising an estimated $100 million.
A fault in Parity's Ethereum wallet freezes over half of the original ICO tokens. The frozen tokens were never retrieved, but Polkadot continued to run.
Polkadot began trading the remaining tokens in August 2020. Over 40 exchanges now list DOT, and significant trade volumes have propelled the coin's market cap into the top five.
The DOT token was likewise “redenominated” 100x when trading commenced. This did not affect the token's market cap; it only improved readability.
Aside from fundamental financial transactions, the DOT token is used for governance, staking, and bonding.
Polkadot, the brainchild of Ethereum Co-founder Gavin Wood, is now one of the world's leading blockchains. It is unusual in that it supports several linked chains using a Proof-of-Stake consensus process. Indeed, one could argue that the project's linked character has helped it gain a substantial number of users over the previous few years.
Kim Dotcom, an entrepreneur and activist, wrote on Twitter on June 5, 2022, that this 'may be the most important thread' he ever writes about a major global collapse. In the thread, Dotcom talks about the economy of the United States and says, 'The U.S. is beyond bankrupt.' Dotcom also talked about the 'Great Reset' and how a 'New World Order' wants to 'shift into a new dystopian future where the elites are the masters of the slaves without the facade of democracy.'
While stocks and the majority of cryptocurrencies fell, the Polkadot price fell precipitously on Thursday and Friday morning.
After starting April on the back of a significant negative pullback, Polkadot's native cryptocurrency DOT has made a 5-day rebound. Its price action, however, was approaching a previously tested resistance zone underpinned by a Fibonacci retracement at the time of publication.