Decentralized exchanges are paving the future of digital assets, no less due to the explosive growth of DeFi. At Polkastarter, we strongly believe that the future of DeFi won’t be limited to a single exchange.
Buying and moving assets between blockchains with ease will become a necessity rather than a nice-to-have. This is why we’re building a permissionless DEX for cross-chain token pools and auctions.
In this post, we want to share the key reasons why we chose Polkadot as the backbone of our platform.
When we envisioned Polkastarter, our key goal was to define the impact that our platform can have on the industry. In short, Polkastarter will enable projects to raise capital in a decentralized and interoperable environment. To achieve this, our platform needed to have the right mix of speed, scalability, interoperability, upgradeability, and governance.
We explored various options during Polkastarter’s prototype phase. During the Web3 Summit in 2018, our CEO Daniel Stockhaus was fascinated by Gavin Wood’s presentation of Substrate. It was a Polkadot project developed by Parity which enabled the founders to create custom blockchains with a simple framework.
Polkadot’s purpose is also aligned with our vision and mission. Our founder believes that:
“The best projects in the [crypto] space share a common goal of wanting to make the world a better and a fairer place. And that’s what we set out to achieve at Polkastarter.”
This, along with its impressive tech stack, made Polkadot a no-brainer for the project. Thus, Polkastarter was born.
Why We Chose Polkadot
Scalability and Speed
Popular blockchains like Bitcoin and Ethereum process anywhere between 7 to 15 transactions per second (TPS). This is extremely slow compared to real-world networks (i.e. credit card networks) which have a speed of 20,000 TPS. Moreover, gas fees can spike to extreme levels in peak periods, making it difficult to scale to mass adoption.
Polkadot serves as a heterogenous sharded blockchain. Simply put, it is a blockchain consisting of various blockchains. Its multi-chain architecture (also referred to as shards) allows transactions to be processed in parallel. This increases its throughput and scalability as more chains come in and the volume of transactions to grow.
Polkadot is designed without any inherent application functionality. This is stark in contrast to previous blockchain implementations that focus more on single-chain architectures with varying degrees of generality over applications.
Each blockchain has its unique architecture. It’s difficult to get different blockchains to sync without a significant amount of effort and resources. This impacts cross-chain communication which also hampers interoperability.
Two-layered solutions like WBTC which tried to solve this issue have experienced serious security concerns. Additionally, blockchain wrappers require every new feature to be custom-built on the system — again, a monumental task that is not worth the effort.
Polkadot’s vision is to leverage the advantage of each blockchain by using a connected architecture that allows for seamless communication between all the chains, thereby solving the issue of interoperability. Chain security is ensured by the network via pooled security. Sovereign chains further bolster security by automatically increasing their token price to avoid attacks.
Polkadot also provides a framework to build a new blockchain, called a Substrate. Substrate seamlessly connects all the parts of a new chain, making existing blockchains easily scalable by reusing existing scaffolds of features. Think of it as adding new pieces to a toy house.
Our platform will also have the ability to interact with external blockchains like Ethereum, Bitcoin, and many others. This is powered by Polkadot’s bridges, a technology that allows parachains to seamlessly communicate both internal and external-wise. These features allow us to realize our mission of building a truly interoperable, cross-chain DEX.
Governance and Upgradability
It becomes difficult to upgrade blockchains when on-chain issues arise due to complex governance structures. The blockchain industry has witnessed such issues in the past with Ethereum’s hard fork, Bitcoin’s block size fiasco, and other notable events.
Traditional blockchains have complicated rules built into the network which makes it difficult to select the key components that need to be altered. Moreover, when changes have to be made, node operators and engineers need to closely monitor the platform, making forking difficult and time-consuming.
Polkadot resolves these issues with a well-drafted governance and voting system. Polkadot code can only be updated based on the voting system. Since the code is an integral part of the blockchain, hard forking is not required.
An update on Polkadot is as simple as deploying a smart contract. Upgrading becomes a seamless process on Polkadot which makes it highly flexible as it can mutate freely, both as a political entity and technology.
How Will We Leverage Polkadot?
We plan to achieve the following values on our project with Polkadot:
Governance: Governance infrastructure that enables community voting using POLS.
Staking: We are launching several types of staking mechanisms, including staking for pool access, staking for governance, and staking for pool rewards. All this will be achieved with the use of POLS.
Liquidity Mining: Liquidity providers can claim rewards in POLS for contributing to the network.
The Future of Polkastarter
Polkadot enjoys the advantage of eliminating entry barriers by making it easy to build a blockchain within its ecosystem while maintaining a standardization for all the chains. It serves as a force of standardization and democratization that is revolutionizing the blockchain world.
We are convinced that Polkadot is the perfect blockchain for Polkastarter. We truly believe that Polkadot’s vision, the one that we share, will shape the future of blockchain.
Sub0 Online Conference
For anyone wanting to find out more about Polkadot, Web3 and Parity we would encourage everyone to join the upcoming Sub0 Conference.
Sub0 Online brings together blockchain developers and Substrate learners from around the world to share and discuss innovative Web3 solutions built using Substrate.
Polkastarter is a permissionless DEX built for cross-chain token pools and auctions, enabling projects to raise capital on a decentralized and interoperable environment based on Polkadot.
With Polkastarter, decentralized projects will be able to raise and exchange capital cheap and fast. Users will be able to participate in a secure and compliant environment and to use assets that go way beyond the current ERC20 standard.