Updated on January 18, 2023 7:34 AM
By enabling communication across specialized blockchains, Polkadot is a network protocol that enables the smooth transmission of any kind of data across any kind of blockchain. The Substrate development platform may be used to create blockchains and decentralized apps (dApps) on the safe and scalable Polkadot network.
The introduction of Polkadot was in May 2020. It is the centerpiece initiative of the Web3 Foundation, a Swiss organization established to provide funding for the creation of software solutions for decentralized web software protocols. Dr. Gavin Wood, the founder of Polkadot and co-founder of the Web3 Foundation, released the project's white paper in October 2016.
By facilitating the cross-chain transfer of any type of data or asset, not only tokens, Polkadot was developed to provide genuine blockchain interoperability. In order to do this, Polkadot has a special architecture that consists of the relay chain, parachains, parathreads, and bridges, which you may learn about how Polkadot works.
DOT is the Polkadot chain's native currency. It runs the network and is employed to pay transaction fees. Holders of DOT have the ability to participate in the governance of the network by casting a vote on certain matters, such as any proposed protocol modifications.
Polkadot is anticipated to have a busy blockchain given that the Web3 Foundation has approved approximately 415 project awards out of 1054 applicants, according to sources. With the introduction of a new staking and nomination dashboard, staking DOT has significantly improved.
The staking of rewards for network validators that help preserve the security of the network is another application for DOT tokens. DOT is also used in the "bonding" procedure to add additional parachain to the Polkadot network. A highly regarded cryptocurrency, DOT has one of the largest market caps in the whole cryptocurrency industry.
Market Capitalization: $6,004,734,730
Dr. Gavin Wood, a co-founder of Polkadot, developed Kusama, often referred to as Polkadot's Canary network, in 2018. It is a blockchain platform designed to act as a scalable and functional testing ground for future apps or blockchains.
Polkadot and Kusama both have a similar codebase. It was created to act as a test environment for applications that would be deployed on Polkadot. However, even after being completed, a number of projects are still active in Kusama.
All those who took part in Polkadot's token sale received an airdrop of KSM, the native coin of Kusama. It is utilized for staking, and all Kusama validators receive freshly created KSM tokens as payment. KSM is not fixed in supply and experiences annual inflation of 10%. The Polkadot ecosystem's second-most valued coin is KSM.
Market Capitalization: $234,656,536
Compound is a DeFi lending technology that was introduced in September 2018 and functions on the Ethereum blockchain. Investors may take out a crypto loan or earn interest on their balance by depositing assets on Compound.
The largest DeFi platform is Compound, with a total value locked (TVL) of more than $2 billion. Compound unveiled COMP, its governance token, in June 2020. Holders of COMPs are eligible to vote on any proposed protocol modifications. They also select the list of assets and the conditions for each asset's collateralization.
The native asset of the DeFi protocol that performs the best is COMP, which is also one of the most valuable coins in the Polkadot ecosystem.
Market Capitalization: $274,083,918
Chainlink is a decentralized oracle network that allows blockchains to safely communicate with data from outside sources. Smart contracts on various chains may get inputs and outputs from real-world sources thanks to Chainlink.
Co-founders Steve Ellis and Sergey Nazarov introduced Chainlink on the Ethereum network in June 2017. LINK, an ERC-20 token that facilitates all transactions on the oracle-based network, is the network's native token.
The network administrators responsible for compiling information from off-chain sources and transforming it into a form that smart contracts may use are rewarded with LINK.
Market Capitalization: $3,198,211,877
Ankr is a decentralized blockchain infrastructure provider created to make it possible for developers and stakeholders to communicate with various blockchains without any issues. It was introduced on the Ethereum blockchain in 2017.
With Ankr, programmers have simple access to the RPC nodes and APIs they need to create decentralized apps. Investors can stake assets on a variety of networks, including Polygon (MATIC), Ethereum (ETH), BNB Smart Chain (BNB), Polkadot (DOT), Avalanche (AVAX), and Kusama, using Ankr (KSM).
The native utility token of Ankr is the ERC-20 token ANKR. All Ankr services, including as node deployment and API services, are paid for using the ANKR token. Holders of ANKR are also able to take part in on-chain governance.
Market Capitalization: $205,749,643
Also read: How 2023 looks for Polkadot?
A network called Polkadot enables many blockchains to exchange messages, including currency, without the need for a third party while sharing their distinctive characteristics and combining their security. In a nutshell, Polkadot is a multi-chain, heterogeneous, scalable solution.
Both have some worth to provide, but it depends on how both ecosystems are adopted. Polkadot enables a bridge across the many blockchains, whereas Cardano seeks to offer a platform that several ecosystems will use.
Traders and investors were given apparent confirmation in 2021 by Polkadot that DOT tokens were worthwhile investments. This trust is first predicated on the DOT token reaching an all-time high and placing highly among several other cryptocurrencies for its recent exponential climb.