Will Polkadot be able to save decentralised finance from Ethereum’s scaling issues?
When talking about Polkadot, words like Web 3.0, interoperability, and layer zero are thrown about indiscriminately. Cointelegraph Research’s latest study examines how Polkadot is addressing distributed ledger scalability while also addressing the save decentralised finance from Ethereum’s scaling issues at the same time.
Is Polkadot able to deliver on the promises made by Ethereum?
Because of Ethereum’s consensus process, all nodes are required to verify all transactions and hence Polkadot keep what Ethereum promised. The Polkadot blockchain, on the other hand, divides large batches of new transactions into numerous smaller shards and executes them in parallel. The blockchains that connect to the network may have vastly varied rules of operation, transaction processing, and capacities, allowing the whole system to operate with much more adaptability.
It is the goal of Polkadot to accomplish scalability without compromising the security of the network. Instead of a single blockchain, as is the case with Ethereum, Polkadot features a number of distinct blockchains, known as parachains, that connect to one primary blockchain, also known as the Relay Chain or layer zero.
Connecting different blockchains via the central Relay Chain, in a manner similar to the hub-and-spoke architecture widely employed in airport design, provides a method to transmit messages and transactions across numerous blockchains without slowing down traffic on the transaction highway.
Because of Polkadot Ethereum’s scaling problems, it is the responsibility of the blockchains that are connected to Polkadot to allow smart contracts. According to Moonbeam, for example, a parachain with complete interoperability with Ethereum contracts has been developed.
Moonbeam’s developers have developed a method for users to interact with digital currencies built on Polkadot via MetaMask, a prominent web-based wallet for decentralised finance that is available on most web browsers. This implies that tokens created on Polkadot’s Substrate, which is a blockchain development platform, may be transferred to Ethereum wallets and smart contract addresses in a seamless manner.
The next tier of the Polkadot ecosystem consists of projects that are created on top of blockchains that are constructed on top of the Relay Chain, which is the foundation of the Polkadot ecosystem.
Because of Polkadot’s increased scalability, many applications are able to overcome the high transaction fees and the limited number of transactions per second associated with Etheruem. Many of the Ethereum-based apps that we have grown to rely on are being rebuilt on the Polkadot Ethereum scaling issues or are being connected through chain-agnostic gateways, which are becoming more popular.
It is impossible to include all of the initiatives that are part of the Polkadot ecosystem, but they range from decentralised cloud computing with the Phala Network to cross-chain custodial wallets.