Polkadot: The Ambition and Reality of Blockchain 3.0

Since the launch of Polkadot, its popularity has remained high. In addition to the rise in coin prices and the upcoming slot auctions, discussions about the "value network" have once again become the focus. Many people see Polkadot as the key to wealth in the cryptocurrency space in 2021.

Reviewing Polkadot's market performance: In July 2020, DOT began to be listed on major exchanges. Until the end of December 2020, the DOT price fluctuated around $5, with a total market capitalization not exceeding $5 billion. In January 2021, DOT experienced two waves of surges, first breaking through $10, and then on January 17, reaching an all-time high of $19.3939.

Polkadot aims to build a scalable Blockchain architecture that enables the coexistence and interoperability of different functional Blockchains through a shared security system. Its founders state that Polkadot seeks to create a more universal model while addressing scalability issues.

Similar to the EOS supernode election, Polkadot's slot auction has also attracted widespread attention in the industry. However, the two are different: EOS is about the distribution of governance rights, while Polkadot is about the distribution of usage rights. The commonality is that capital remains the determining factor.

Polkadot uses a modern variant of "candle auctions" for slot bidding. This method aims to maximize the amount of DOT bound over a two-year period while avoiding auction sniping situations. This mechanism may lead to an increase in DOT prices, but it could also trigger a chain reaction causing new bidders to pay for the previous wave.

Regarding performance, Polkadot is seen as a major competitor to Ethereum. However, current trading data shows that Polkadot's daily trading volume is far lower than that of Ethereum. Although Polkadot's market capitalization is about 10.94% of Ethereum's, its trading volume is only 0.7% of Ethereum's.

With the development of DeFi, the demand for the performance of underlying public chains has become more urgent. The Polkadot white paper proposes a method to support kernel scalability, aiming to achieve global commercial-level scalability and privacy.

From Blockchain 1.0 to smart contracts, and then to the 3.0 phase, innovation has always been the driving force. We look forward to a more diversified blockchain ecosystem, but addressing transaction congestion and performance issues remains the core of current development. Whether Polkadot can truly become the representative of "Blockchain 3.0" still requires time and market validation.