TL;DR
Polkadot, as one of the top 5 alternative Layer 1’s after Ethereum, has announced a restructuring. The current lease model for parachains will be replaced with a system of selling “core time.” View it like a much more fine-grained blockspace auction than the current two-year parachain slot durations. These were a high barrier of entry. With the 2.0 model, Polkadot wants to make it easier for developers to build.
‘Space, not chains. Apps, not chains.’ Those are the first six words on Gavin Wood’s slide deck of the speech he gave at the Polkadot Decoded conference 2023. The founder of Polkadot stresses the change of focus. It’s not about the chains, it’s about the applications. It’s about a departure from the leases and slots model and towards a Polkadot with a lower barrier of entry.
The Current State of Polkadot
Polkadot is a ‘blockchain of blockchains’, designed to support interconnected, application-specific Layer-1 chains known as parachains. Users stake DOT on the relay chain, the ‘Layer 0’ that secures all the parachains.
In the bull market of late 2020 and early 2021, it was destined to be one of the big Ethereum challengers. And it was, but perhaps price peaked too early. In the second wave of the 2021 bull market, its thunder was stolen by the likes of Solana, Cardano and Avalanche. Polkadot’s parachain auctions started on Nov. 11, 2021, right when – in retrospect – the bear market was about to ruin the mood.
While SOL has rebounded most sharply (more than 200%) from the bear market lows, DOT (and the other mentioned alt layer 1’s are yet to make a significant move. It is still within 40% of the lows.
There are reassuring statistics though. For example:
- Polkadot still has 750 full-time developers working on it, according to Electric Capital.
- During Q2, the Polkadot ecosystem averaged 295,000 monthly active users.
Polkadot 2.0: A Decentralized ‘Multi Core Computer’
As mentioned, Polkadot is built and designed to support various interconnected, sub-chains called parachains (short for parallelized chains). These are in limited supply, and only one or two slots open every month. In a parachain auction, projects compete for such a slot. For example, the second parachain slot was won in November 2021 by Moonbeam, for more than one 35M DOT (more than 1 billion dollars at the time). Over 200,000 participants contributed their DOT tokens to the crowdloan.
Polkadot 2.0 moves away from this model and views itself as a multi core computer. Basically, it rebrands the current parachains as cores, of which it has about 50 now. So, Polkadot is like a 50 core CPU, independently running, processing different applications. And the projection is that Polkadot can grow to hundreds of cores.
What do these cores do? They have indeed quite a number of characteristics of a CPU core. For example, their bandwith equals a certain amount of MB per second. This figure is expected to go up.
Core Time as a Commodity for Sale
The core time Polkadot will sell is analogous to the concept of blockspace. It’s the product any blockchain has to offer. After all, the core time/blockspace you get is not on just any computer, but on a…
Erik started as a freelance writer around the time Satoshi was brewing on the whitepaper.
As a crypto investor, he is class of 2020. More of a holder than a trader, but never shy to experiment with new protocols.
