What is Polkadot?

Polkadot is a sharded protocol that enables blockchain networks to operate together. Polkadot is an open-source project founded by the Web3 Foundation, whose co-founder Dr Gavin Wood is credited with coming up with the term Web3. Polkadot facilitates the trustless sharing of information between public and private chains, permissionless networks, oracles, and future technologies. As a result of this function, Polkadot is recognised as a layer-0 metaprotocol that serves as the underlying network for layer-1 blockchains known as parachains (parallel chains).

A brief history of Polkadot

Polkadot was founded in 2016 by Gavin Wood, former Ethereum co-founder and CTO. In his view, the vision behind Polkadot was to deliver on what Ethereum could not. By October of that year, he had finished the first draft of the Polkadot white paper, which outlined his plans to create a new multi-chain ecosystem that would serve as a bridge to other blockchains.

In 2017, Dr Wood and Parity’s Peter Czaban founded the Web3 Foundation, which would later host Polkadot’s very first token sale in October 2017. The sale raised US$145 million through a public sale of half the total 10 million supply of its token DOT. It then raised a further $3.3 million in a private token sale in 2020.

How Polkadot works

Polkadot’s multi-chain technology allows different blockchains, which would otherwise not be able to interconnect, to transfer information in a trust-free fashion. Through Polkadot, these linked blockchains share their unique features and pool their security. The platform does this through four core components: a Relay Chain that creates interoperability and consensus between blockchains, independent chains called Parachains, Parathreadsd that provide flexible connectivity, and Bridges that link parachains and parathreads with external blockchains.

What is Polkadot used for?

As the native coin of its namesake blockchain, Polkadot (DOT) serves three distinct purposes: governance over the network, staking, and bonding.