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4.2

Case Study on Polkadot Protocol

As described on their official website, “Polkadot is a heterogeneous multi-chain with

shared security and interoperability”. The Polkadot chain has a central main chain,

known as the Relay Chain. All validators of the Polkadot network are staked on this

Relay Chain, and DOT is the native cryptocurrency of this chain. It should be noted

that this relay chain has limited functionalities, and smart contracts are not supported

on the relay chain. The main purpose of the Relay Chain is to coordinate the system

as a whole including other parachains.

When it comes to interoperability, what makes Polkadot unique is its concept

of Parachains and Paratheads. Like cores on a computer’s processor, Polkadot

supports execution slots that can be subscribed to. Either DOT can be staked to lease

a slot (in case of Parachain) or pay on a per-block basis (in case of Paratheads).

Parachains can be considered as the separate blockchain of their own, which

are connected to the Relay Chain. The parachain has its own set of validators and

Collators. These parachains, however, can’t have their own consensus mechanism

but can have their own economics and own native tokens. Parachains can interact

with each other through XMCP.

The official wiki of Polkadot compares Parathreads with swap memory

in computers. The main difference between Parachain and Parathreads being

parathreads doesn’t have a dedicated slot and compete on a per-block basis. This

is greatly helpful because this needs less capital, and parachain can be changed to

parathread in future and vice versa. Parachains too can communicate with other

parachains or parathreads through XMCP.

Figure 11 depicts Relay Chain, Parathreads, and Parachains through XMCP.

Besides parachains and parathreads, Polkadot also has the concept of Bridges.

As the name suggests, Bridges can like connecting modules or smart contracts that

help Polkadot interact with other blockchain networks like Ethereum and Bitcoin.

This opens up a newer horizon of implementation because bridges can connect two

blockchains that are otherwise economically sovereign and technologically unique.

The Polkadot ecosystem has two types of bridges.

a.

Bridge Module

b.

Bridge Contract

Bridge Modules are designed to receive messages from non-parachain blockchain,

which are then deployed to Polkadot either as a system-level parachain or a

community-operated parachain. Because of this, these non-parachain blockchains act

like virtual parachains, which can then have the interoperability benefits of Polkadot.

Bridge Contract can be used to interact with blockchains, which support smart

contracts like Ethereum. This is a result of two smart contracts, one in each network.

SincePolkadotRelayChaindoesn’tsupportsmartcontracts,aparachainthatsupports

smart contract must be used. These smart contracts interact with each other to achieve

the goal. So, for example, depositing DOT on a smart contract in a parachain may

generate some ERC20 token in the Ethereum Mainnet.