An overview of the Polkadot ecosystem

The “parachain” model was created on the belief that the future of Web3 will involve many different types of blockchains working together. Just as the current version of the internet caters to different needs, blockchain needs to be able to provide a variety of services. Parachains solve this problem”. – Gavin Wood, founder of Polkadot

core point

  • The first 11 parachains of Polkadot have gone live.
  • The first 11 parachains pledged 126 million DOT (11% of total supply; $2.1 billion) over a two-year lease period.
  • Each parachain brings unique capabilities and use cases to the ecosystem.
  • The next major technical task is to establish a cross-consensus message format (XCM).

Introduction—Parachains are live

On December 17, 2021, five years after its founding, Polkadot successfully completed its multi-phase launch, kicking off the parachain launch. Now that the parachain is live, end users can trade on Polkadot.

What is a parachain? A parachain is a highly customized Layer 1 developed for specific applications using Polkadot’s blockchain development framework Substrate. Similar to traditional Layer1, it has its own economy, token, governance and users. However, unlike traditional Layer-1, parachains are not isolated. Instead, it is connected to the relay chain, another major technical component of Polkadot.

What is a relay chain? The relay chain is the core of Polkadot. It is the Layer-0 base chain that houses all validators and is responsible for securing, governing and connecting parachains. In addition to the management of relay chains, parachains also have sovereign governance rights, which will be explained further in the analogy below. A relay chain can support around 100 to 250 parachains. Parachains are capped primarily by the cost of scaling Polkadot’s Cross-Chain Message Passing (XCMP) and maintaining an optimal 10:1 validator to parachain ratio to ensure decentralization and performance.

An overview of the Polkadot ecosystem

What does the Polkadot token (DOT) do? Polkadot’s token DOT is a utility and governance token used to participate in governance, transaction fees, security of staking, and security for parachain card slots. As of March 2022, DOT is the most frequently held asset in crypto funds.

An overview of the Polkadot ecosystem

In addition to venture capital, Polkadot’s unique architecture combined with Substrate’s flexibility has successfully established itself as the second largest developer community. Now that the parachain has been launched, a large amount of VC funds have been confirmed, and the fruits of developers’ labor can be enjoyed by the public. In this report, we will delve into Polkadot’s top 11 parachains.

An overview of the Polkadot ecosystem

Ecosystem Overview – 11 Parachains

As mentioned above, a relay chain can support around 100 to 250 parachains. To gain the advantage that the relay chain offers, it must win a candle auction of parachain slots by staked DOT.

Potential parachain bidders typically raise DOT through their community in exchange for their native token. At random times in the candle auction, the parachain with the most staked DOT wins the slot auction. At the end of the lease period, the lender’s staked DOTs are returned (they will keep the parachain token).

After 11 auctions, 126 million DOT (11% of the total supply; worth $2.1 billion) have been pledged. The first batch of winning bidders (Auctions 1-5) landed on Polkadot on December 17, 2021. The second batch of winning bidders (Auctions 6-11) settled on Polkadot on March 11, 2022. Each winner brings unique capabilities and use cases to the Polkadot ecosystem.

An overview of the Polkadot ecosystem

An overview of the Polkadot ecosystem

AcalaAcala

Acala won Polkadot’s first auction, raising 32,515,980 DOT. Acala is a decentralized finance network built on Polkadot that powers the aUSD stablecoin ecosystem. Acala has a suite of aUSD-centric financial features, including:

Akara Dollar (aUSD)

 The Acala Dollar (aUSD) is a stablecoin produced by the Honzon Protocol — a mechanism inspired by the Maker DAO (DAI). Users mint aUSD by creating an overcollateralized debt position using approved reserve assets such as DOT, LDOT, and ACA. The team plans to expand the collateral to BTC, ETH, and other original tokens in denominations. Along with the original nine Polkadot parachain teams and several backed venture funds, Acala has launched a $250 million aUSD ecosystem fund. As of March 8, 2022, 6.17 million aUSD has been issued.

Liquid pledge (L-Token)

Acala implements the liquidity mortgage function through the Homa protocol. Users pledge their tokens to obtain L-tokens (such as LDOT), which represent the main assets pledged and the accumulated pledge income. L-Tokens are available as ERC-20 and Substrate-based tokens, as well as in Acala’s DeFi protocol.

Acala Swap

Acala Swap is a constant product AMM DEX that supports ERC-20 and native Substrate-based tokens. Acala Swap is hosting a drain campaign to celebrate its launch, where users can pay gas fees on the Acala exchange with any token.

Acalatoken – ACA

Acalatoken (ACA) is a utility and governance token used to participate in governance, transaction fees and incentivize Acala collector nodes.

Additionally, Acala has partnered with Current, a community-run finance sector fintech unicorn, while Acala EVM+ enables full-stack composability between EVM and Substrate. As of early March 2022, Acala had a TVL of $528 million.

An overview of the Polkadot ecosystem

An overview of the Polkadot ecosystem

Moonbeam

Moonbeam won Polkadot’s second auction, raising 35,759,931 DOT. Moonbeam is an EVM-compatible cross-chain smart contract platform that allows developers to migrate their projects with little to no code modification and provides a developer-friendly environment for launching new projects.

Ethereum-style unified account

Any parachain can be EVM compliant by enabling the frontier pallet designed by Parity and Moonbeam. However, EVM-compatible parachains require the user to have the private key of the EVM and Substrate accounts. Moonbeam provides unified accounts – users only need a private key (EVM-style key) to interact with EVM and Substrate. The unified account feature allows users to use their existing accounts on Moonbeam and use the Metamask wallet.

XC-20 Assets

Moonbeam has launched the XC-20 token class, a new token class that provides native interoperability of Substrate-based assets while allowing users and developers to interact through a familiar ERC-20 interface.

Moonbeam token – GLMR

Moonbeam token (GLMR) is a utility and governance token used to participate in governance, transaction fees (80% burned and 20% allocated to the on-chain treasury), incentivize Moonbeam collector nodes, and support gas metering for smart contract execution.

Moonbeam has $141 million in TVL as of early March 2022, and the ecosystem continues to grow.

An overview of the Polkadot ecosystem

Astar Network

Astar Network won Polkadot’s third auction, raising 10,333,552 DOT. Astar is a multi-chain smart contract platform that supports WASM and EVM virtual machines, providing a variety of solutions for developers to build smart contracts.

Across Virtual Machines (X-VM)

Until now, virtual machines were usually disconnected independently and hard to interact with, such as calling a Substrate contract in an EVM contract. To unify various smart contract engines, Astar is developing Cross Virtual Machine (X-VM), which will allow smart contracts to execute calls and read stored data from different virtual machines and languages.

ZK solutions

Astar Corporation has been developing ZK scaling solutions, and in the near future, Astar will implement the ZK Plonk pallet (this plonk is called the generic ZK Snark).

DApp Staking

 When building applications, developers are often faced with significant expenses with no offsetting income. DApp staking is a reward mechanism for developers or administrators of smart contracts. Astar’s staking rewards are distributed to application developers according to a dynamic reward model. Ultimately, Astar will allocate 50% of the staking rewards to developers. Astar also plans to roll out features that allow developers to get project funding directly from backers.

Astar token – ASTR

Astartoken (ASTR) is a utility and governance token for participating in governance, transaction fees, incentivizing Astar collector nodes, DApp investment and Layer2 application support.

Additionally, Astar, which backs Polkadot’s largest DEX via TVL ArthSwap, recently raised $22 million in funding led by Polychain, which also features two ethereum bridges. Astar has a TVL of $386 million as of early March 2022. Astar plans to connect with Cosmos and will add a ton of extra features.

An overview of the Polkadot ecosystem

Parallel Finance

Parallel Finance won Polkadot’s fourth auction, raising 10,751,519 DOT (79% raised through the Parallel auction lending platform). Parallel is a fully functional DeFi platform.

currency market

Parallel’s decentralized money market protocol provides lending and staking functionality. Users who choose to pledge can participate in leveraged pledge. Leveraged pledge allows users to lend and pledge at the same time, thereby obtaining double income. How to achieve? xDOT can be lent back to Parallel for borrowing fees on top of the current staking yield. Users can further choose to borrow with xDOT to increase leverage. The Parallel Finance platform selects the highest-performing node through an algorithm, so as to maximize the pledge income.

Auction Loan Platform

 The auction lending platform raises DOT for potential parachains, contributors are incentivized to lend their DOT through the auction lending platform, as they receive additional bonuses from Parallel and potential parachains, and remain liquid through a liquid collateralized derivative, cDOT sex.

Parallel token – PARA

Parallel token (PARA) is a utility and governance token used to participate in governance, transaction fees, incentivize parallel finisher nodes, and is staked in a security module.

Additionally, Parallel plans to release an automated market maker AMM with Stable Swap functionality, a multi-chain wallet, and a series of additional features. As of early March 2022, the Parallels auction lending platform has raised $553 million and has a 22% market share.

An overview of the Polkadot ecosystem

An overview of the Polkadot ecosystem

Clover Finance

Clover Finance won Polkadot’s fifth auction, raising 9,752,487 DOT. Clover is an EVM-compatible cross-chain infrastructure platform that provides developers with tools to migrate and scale their applications.

Universal cross-chain

Clover is compatible with various wallets for interacting with Substrate-based chains on Polkadot and Kusama, EVM chains and applications on Solana. Users can send, receive, wrap and unwrap cross-chain assets in different networks without navigating between them (similar to Zapper).

Clover Wallet

Clover Wallet is a non-custodial cross-chain wallet that helps users manage, track, and interact with assets on Polkadot and Kusama’s Substrate-based chains, EVM chains, and Solana. Clover Wallet is available on mobile, extension and web.

Clover cross-chain resource manager

Clover Cross-Chain Explorer is a cross-chain block explorer that provides a multi-chain index across Substrate-based chains, EVM chains, and Solana on Polkadot and Kusama, allowing users to search by blocks, transactions, and accounts.

Clover token – CLV

Clover token (CLV) is a utility and governance token for participation in governance, transaction fees, incentivizing Clover collator nodes, and treasury management.

Additionally, Clover plans to release cross-chain bridges, cloud service APIs, gas fee redistribution (sharing a percentage of transaction fees with developers), low gas end-user experience, and identity and reputation-based fees for reputable users the price of.

An overview of the Polkadot ecosystem

Efinity

Efinity won Polkadot’s sixth auction, raising 7,695,377 DOT. Efinity is a blockchain dedicated to NFTs developed by the Enjin team, designed to support NFTs on any blockchain.

token standard

Efinity is introducing a new standard for interoperable, cross-chain tokens. It will be compatible with the underlying chains Polkadot and Kusama, ERC-20, ERC-1155, ERC-721 and other chains and their standards. The token standard supports homogenized tokens, non-fungible tokens, and grouped NFTs.

Fuel Tanks 

Fuel Tanks are used for transaction fees, and developers deposit EFI into their Fuel Tanks to subsidize their user/player costs.

Discrete Accounts

Discrete accounts enable easy entry for users by not requiring new users to open cryptocurrency wallets. On-chain items can be placed in developer-controlled wallets and players can claim them at a later time.

NFT.io Marketplace

Efinity and Enjin are developing an NFT marketplace called NFT.io, which is expected to go into closed testing in March, NFT.io is a cross-chain NFT marketplace that provides a new price discovery mechanism through Efinity.

EFI

Efinity token (EFI) is a utility and governance token used to participate in governance, transaction fees, facilitate liquidity, reward network participants, fund Fuel Tanks, and increase transaction limits on Enjin’s JumpNet EVM chain.

Additionally, Efinity will introduce novel user-friendly features and improve the utilization of Enjin’s existing infrastructure. Over 100 projects have already committed to building apps and games on Efinity and Enjin.

An overview of the Polkadot ecosystem

Composable Finance

Composable Finance won Polkadot’s seventh auction, raising 6,075,487 DOT. Composable, a DeFi infrastructure platform designed for cross-chain interoperability, is building a comprehensive technology stack.

Cross-chain virtual machine (X-VM)

A Cross-Chain Virtual Machine (XCVM) is a virtual machine that provides an environment for developers to run cross-chain smart contract functions. XCVM connects Substrate to other networks through its innovative availability layer, using a routing layer to determine the best route for instructions.

Mosaic

Mosaic is a cross-chain transfer availability layer that integrates with EVM-compatible chains, including Ethereum, Arbitrum, Avalanche, Polygon, Fantom, Moonriver, and more. Mosaic uses multiple guarantees to ensure the delivery of transfers, including liquidity forecasting, rebalancing of liquidity vaults, and community-run liquidity bots that developers can build by using the Mosaic SDK.

Mural

Mural facilitates the cross-chain transfer of NFTs utilizing Mosaic.

Composable  token – LAYR

Composable token (LAYR) is a utility and governance token used to participate in governance, transaction fees, and incentivize Composable collector nodes.

An overview of the Polkadot ecosystem

Centrifuge

Centrifuge won Polkadot’s eighth auction, raising 5,435,161 DOT. Centrifuge brings real-world asset financing to DeFi to reduce the cost of capital for small businesses and provide DeFi investors with a stable source of income independent of the cryptocurrency market.

peer-to-peer network

Centrifuge’s peer-to-peer network provides a secure way to create, exchange and verify asset data between collaborators and tokenize assets into NFTs. Asset originators can selectively share asset details with service providers, who can evaluate data and contribute information to minted NFTs, and data provenance can be verified using cryptographic signatures.

Tinlake

Tinlake is an open market application that acts as a real-world asset. Businesses tokenize their financial assets into NFTs and use the NFTs as collateral for their Tinlake pools. Users have access to all pools and invest DAI in pools of their choice, each of which contains two risk levels with different risk-reward levels.

Centrifuge token – CFG

Centrifuge token (CFG) is a utility and governance token used to participate in governance, transaction fees, incentivize Centrifuge collector nodes, and reward network participants.

Additionally, Centrifuge leverages existing legal and commercial frameworks for secure financing of real-world assets. Centrifuge has $76 million in TVL as of early March 2022.

 

An overview of the Polkadot ecosystem

HydraDX

HydraDX won Polkadot’s ninth auction, raising 2,462,543 DOT. HydraDX is a cross-chain liquidity protocol that reduces the fragmentation of liquidity by bringing many crypto assets into a single trading pool.

Omnipool

HydraDX Omnipool is a liquidity pool that serves all assets. All transactions in the Omnipool are denominated in LERNA (LRNA), which means that LRNA allows assets to price against each other. The amount of lRNA available in the pool fluctuates in relation to the total liquidity – when liquidity is increased, lRNA is minted, and when liquidity is removed, lRNA is burned. Since Omnipool mints LRNA to match each added liquidity, LPs are able to provide liquidity for any asset they want and incur transaction fees when those assets are purchased from the pool.

HydraDXtoken – HDX

HydraDXtoken (HDX) is a utility and governance token used to participate in governance and stabilize LRNA value.

An overview of the Polkadot ecosystem

Interlay

Interlay won Polkadot’s tenth auction, raising 2,751,954 DOT, Interlay can exchange Bitcoin to any blockchain.

InterBTC

InterBTC is a fully collateralized, interoperable BTC-pegged derivative. To mint interBTC, users lock their BTC in a vault. Vaults can be existing or created by BTC owners themselves. All vaults are over-collateralized with specific assets. If malicious activity occurs in the vault, the over-collateralized assets will play an insurance role. If malicious activity actually occurs, BTC depositors will be compensated for the slashed collateral at a premium. The first batch of vaults will be collateralized by DOT.

InterBTC and competitors

InterBTC is a decentralized and trustless BTC-pegged derivative. How to achieve? Anyone can become a vault of InterBTC (decentralized), the vault cannot prevent users from minting InterBTC (censorship resistant), the vault locks the collateral in different assets (capital efficiency), if BTC is lost or stolen, users can Repay with collateral at favorable interest rate (no trust).

Interlay token – INTR

Interlay token (INTR) is a utility and governance token used to participate in governance, transaction fees and incentivize Interlay collector nodes. The team plans to integrate INTR into interBTC for advanced features, better rates, and higher insurance coverage.

Additionally, Interlay plans to add new vault collateral and connect with other blockchains including Ethereum, Cosmos and Solana. Interlay aims to be a decentralized Bitcoin bank, enabling vaults to reuse custodial BTC and deposited collateral for structured financial products.

An overview of the Polkadot ecosystem

Nodle

Nodle won Polkadot’s 11th auction with a fundraise of 2,475,528 DOT. Nodle is a decentralized wireless network that provides secure, low-cost connectivity and data mobility for IoT devices. The Nodle Network leverages Bluetooth Low Energy (BLE) through millions of smartphones and routers, enabling businesses and smart cities to connect IoT devices to the internet at low cost while maintaining privacy and security.

Nodle Cash App

The Nodle Cash App is a mobile application that enables users to connect to the Nodle network known as the Citizen Network. Once the app is downloaded, users must turn on Bluetooth and location services in the phone’s settings. The Nodle Cash app will detect sensors and smart devices and connect to them anonymously. For the services provided, app users receive Nodle Cash, also known as NODL tokens.

Nodle token – NODL

Nodle token (NODL), also known as Nodle Cash, is a utility and governance token used to participate in governance, transaction fees, reward participants of the Nodle network, and incentivize Nodle collector nodes. NODL is distributed to participants of the Nodle network every six seconds.

Additionally, the Nodle network has 5 million daily active smartphones and 30 million IoT devices, moving around 100GB of data daily across more than 100 countries.

Conclusion – just the beginning

Going forward, Polkadot plans to conduct 30 new slot auctions by February 2023 (bringing the total to 41). Arguably the most important technical task during this period was the establishment of Polkadot’s Cross Consensus Message Format (XCM). Currently, a light client version of HRMP is being tested on Kusama. A core tenet of Polkadot’s value proposition is to ensure the successful rollout of XCM for smooth cross-parachain communication, which will continue to build on its unique modular architecture and drive strong market share in 2022 and beyond.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/an-overview-of-the-polkadot-ecosystem/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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