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An Introduction to Polkadot [email protected] April 2020

Table of Contents “Polkadot Introduction 3 empowers Overview 4 the individual Heterogeneous Sharding 5 against much Scalability 6 more powerful Upgradeability 7 corporate and Transparent Governance 8 state actors.” Cross-Chain Composability 8 -Dr. Gavin Wood, Polkadot Architecture 9 Polkadot Founder Polkadot Consensus Roles 10 Polkadot Governance Roles 10 The DOT Token 11 Kusama Network 12 Substrate 13 About Web3 Foundation 14 About Parity 15 Friends of Polkadot 16 Contact 17 [email protected] April 2020

Introduction 3 LESS TRUST MORE TRUTH Every day we interact with technologies controlled by a handful of large companies whose interests and incentives often conflict with our own. If we want the benefits of using their proprietary apps, we’re forced to agree to terms that most of us will never read, granting these companies complete control over the data we generate through each interaction with their tools. Because that data can often paint a detailed picture of our personal lives, it’s become a resource more valuable than oil. And we’re giving it up for free—with no choice but to trust that it won’t be lost, stolen or misused. At the same time, progress in open-source and decentralized technologies like blockchain has shown that we can build systems that prioritize individual sovereignty over centralized control. With these new systems, there’s no need to trust any third parties not to be evil. But blockchain technology, in its current form, isn’t ready to break the corporate stranglehold on the web just yet. Despite the promise and the progress made, we have yet to see significant real-world deployment of the technology. [email protected] April 2020

Overview 4 Polkadot is a next-generation blockchain While blockchains have demonstrated protocol that unites an entire network of great promise in several fields—Internet of purpose-built blockchains, allowing them Things (IoT), finance, governance, identity to operate seamlessly together at scale. management, web decentralization, and Because Polkadot allows any type of data to asset-tracking to name a few—design be sent between any type of blockchain, it limitations in previous systems have largely unlocks a wide range of real-world use cases. hindered large-scale adoption. By bringing together the best features from Polkadot’s design offers several distinct multiple specialized blockchains, Polkadot advantages over existing and legacy networks, paves the way for new decentralized including heterogeneous sharding, scalability, marketplaces to emerge, offering fairer ways upgradeability, transparent governance and to access services through a variety of apps cross-chain composability. and providers. THIS IS BLOCKCHAIN UNBOUNDED [email protected] April 2020

Heterogeneous Sharding 5 Many chains, one network Will there eventually be one blockchain to Thanks to Polkadot’s unique heterogeneous rule them all? We don’t think so. sharding model, each chain in the network can be optimized for a specific use case All blockchains make different tradeoffs to rather than being forced to adapt to a support specific features and use cases, and one-size-fits-all model. as chain specialization increases, the need to transact between them will only increase More chains and more specialization means over time. more possibilities for innovation. Polkadot is a sharded blockchain, meaning it connects several chains together in a single network, allowing them to process transactions in parallel and exchange data between chains with security guarantees. [email protected] April 2020

Scalability 6 Blockchains that grow One blockchain isn’t enough to support a processed in parallel. This system removes bustling future of decentralized applications. the bottlenecks that occurred on earlier The limited throughput and lack of runtime networks that processed transactions specialization in early blockchains made one-by-one. them impractical for scaling in many real-world use cases. Polkadot will be able to scale even further in the future with a planned feature known as By bridging multiple specialized chains nested relay chains, which will increase the together into one sharded network, Polkadot number of shards that can be added to the allows for multiple transactions to be network. [email protected] April 2020

Upgradeability 7 Future-proof your blockchain with forkless upgrades Early computer games were shipped on network, often taking months of work, and printed circuit boards known as cartridges. particularly contentious hard forks can break These cartridges were expensive and time- apart a community. consuming to make as the code was etched onto the chips, leaving no room for error. Polkadot revolutionizes this process, enabling blockchains to upgrade themselves without These days we’re used to our apps, games the need to fork the chain. These forkless and browsers updating frequently, even upgrades are enacted through Polkadot’s automatically. Developers fix bugs before transparent on-chain governance system. they can cause problems, and new features are added as better solutions become With this feature, Polkadot enables projects to available. stay agile, adapting and evolving with the pace of technology. It also significantly reduces Like all software, blockchains need upgrades the risk associated with contentious hard in order to stay relevant. However, it’s far forks—a severe barrier to entry for many more difficult to upgrade a blockchain organizations. than an app, game, or browser. Upgrading conventional blockchains requires forking the [email protected] April 2020

Transparent Governance 8 Community powered Early blockchains had no formal governance All DOT holders are able to propose a change procedures. Individual stakeholders were to the protocol or vote on existing proposals. powerless to propose or veto protocol They can also help elect council members changes unless they knew the right people. who represent passive stakeholders within Polkadot’s governance system. Polkadot is different. It’s governed by anyone who owns DOTs, Polkadot’s native currency, in a fair and transparent way. Cross-Chain Composability Collaborative by design Early blockchains were like walled Thanks to Polkadot’s ability to bridge gardens closed off to other networks. blockchains, Polkadot shards will also be But as the number of chains for specific able to interact with popular decentralized- use cases continues to rise, so does the finance protocols and cryptoassets on need for cross-chain communication and external networks like Ethereum. interoperability. Polkadot’s cross-chain composability and message passing allows shards to communicate, exchange value, and share functionality, opening the door to a new wave of innovation. [email protected] April 2020

Polkadot Architecture 9 Connecting the dots Polkadot unites a network of heterogeneous blockchain shards called parachains. These chains connect to and are secured by the Polkadot Relay Chain. They can also connect with external networks via bridges. Relay Chain Parachains Bridges The heart of Polkadot, Sovereign blockchains Special blockchains that responsible for the that can have their own allow Polkadot shards network’s security, tokens and optimize their to connect to and consensus and cross-chain functionality for specific communicate with external interoperability. use cases. To connect to networks like Ethereum and the Relay Chain, parachains Bitcoin. can pay as they go or lease a slot for continuous connectivity. [email protected] April 2020

Polkadot Consensus Roles 10 Validators Collators Secure the Relay Chain by staking DOTs, Maintain shards by collecting shard validating proofs from collators and transactions from users and producing participating in consensus with other proofs for validators. validators. Fishermen Monitor the network and report bad behavior to validators. Collators and Nominators any parachain full node can perform Secure the Relay Chain by selecting the fisherman role. trustworthy validators and staking DOTs. Polkadot Governance Roles Council Members Technical Committee Elected to represent passive stakeholders Composed of teams actively building in two primary governance roles: proposing Polkadot. Can propose emergency referenda and vetoing dangerous or referenda, together with the council, malicious referenda. for fast-tracked voting and implementation. [email protected] April 2020

DOTs 11 The DOT Token The DOT token serves three distinct purposes: governance over the network, staking and bonding. Governance Staking Bonding Polkadot token holders Game theory incentivizes New parachains are added have complete control over token holders to behave by bonding tokens. Outdated the protocol. All privileges, in honest ways. Good or non-useful parachains which on other platforms actors are rewarded by are removed by removing are exclusive to miners, this mechanism whilst bad bonded tokens. This is a will be given to the Relay actors will lose their stake form of proof of stake. Chain participants (DOT in the network. This ensures holders), including managing the network stays secure. exceptional events such as protocol upgrades and fixes. [email protected] April 2020

Kusama Network 12 Kusama is an early, unaudited and unrefined Play with release of Polkadot created to test the chaos on network’s technology and economic incentives in a real-world environment. Kusama, It’s also the perfect place for parachain developers to test ideas before deploying Polkadot’s to Polkadot. wild cousin Kusama is owned and governed by a community of supporters who hold KSM tokens. There is no central kill switch, meaning it will live on as an independent community network. Ready to break stuff? Find out how to get KSM tokens and start staking, validating and participating in governance by reading the user guide. [email protected] April 2020

Substrate 13 Your blockchain builder, Your blockchain upgrader, Your blockchain. Substrate is your blockchain-building Thanks to Substrate’s forkless upgrades framework, making it easy to create a and transparent governance tools, you can custom blockchain optimized for your add new features over time without fear unique use case. of splitting the network. Easier, risk-free upgrading means your blockchain can grow Substrate is fully modular and flexible: and evolve with the pace of innovation and mix and match ready-made components ever-changing market needs. and build out your core business logic while leaving the rest to the framework. Substrate also comes with native support Plug-and-play modules like consensus, for connecting to Polkadot right out of networking and finality give you the the box. Cumulus, Substrate’s tool for freedom to focus on your specific area connecting your blockchain to a network of expertise, saving you substantial time of blockchains, unlocks interchain and effort in the development process. communication, collaboration and shared Keep things lean by implementing only the security. necessary functionality on your custom blockchain. Learn more about Substrate here and at the Substrate Developer Hub. [email protected] April 2020

About Web3 Foundation 14 Web3 The future of the foundation Foundation Web3 Foundation seeks to fund or otherwise assist in the development and deployment of projects aligned with its Web3 Foundation was created to mission: nurture and steward technologies and applications in the fields of Innovative blockchain technologies, decentralized web software protocols, cryptographic messaging protocols. particularly those that utilize modern cryptographic methods to safeguard Peer-to-peer networking infrastructure decentralization, to the benefit (such as libp2p and devp2p) and for the stability of the Web3 ecosystem. Polkadot is the flagship Crypto-economic mechanisms protocol of Web3 Foundation. (such as DAC/DAOsoftware) Data publication systems (such as IPFS). Learn more at web3.foundation and on Twitter and YouTube. [email protected] April 2020

About Parity 15 The Web3 Foundation has commissioned Parity Technologies to build Polkadot. development Founded by Ethereum cofounder team Dr. Gavin Wood, Parity is a global team of top distributed systems engineers, cryptographers, solutions architects and researchers. Parity has fundamentally shaped the blockchain industry, from building the highly-adopted Parity Ethereum client and implementations of Bitcoin and Zcash, to developing the next generation of blockchain technology with Substrate and Polkadot. Learn more about Parity Technologies at parity.io and follow the team on Twitter, Telegram, YouTube, and Riot. [email protected] April 2020

Collaborations 16 Friends of Polkadot is designed to work with public, private and enterprise chains. We are excited Polkadot to work closely with the following partners to develop the first use cases, and look forward & Substrate to collaborating with other blockchain projects seeking to adopt this technology: [email protected] April 2020

17 Dive deeper, stay connected and get building! Learn more on the → Join or → host Polkadot → Website a Polkadot meetup and → Wiki in your area Subscribe to the Polkadot Chat with the Polkadot team → Newsletter on → Riot Get involved by → joining the Additional resources → Polkadot Ambassador can be found Program → here Follow Polkadot on: [email protected] April 2020